Grayscale’s Ethereum and Bitcoin Trust Spin-Offs: What Do Holders Really Need to Know?

• Grayscale Set to Launch Mini Bitcoin and Ethereum Trusts in July
• Holders will receive 10% value of the original fund shares in their mini ETFs

The mini versions of Grayscale Ethereum And Bitcoin The trusts will begin trading in July.

These will be variable-percentage spin-offs of the original funds, Ethereum Trust (ETHE) and Bitcoin Trust (GBTC). The Grayscale Mini Ethereum Trust (ETH) will be a 10% spin-off of ETHE and would be the the cheapest US ETH spot ETF with 0.15% fee. It will launch and start trading on July 23.

How will the Mini Ethereum Trust impact holders?

Regarding the impact of the split on ETHE shareholders after July 23, Bloomberg ETF analyst James Seyffart said that holders will receive 1 share per split.

“If you own 1,000 shares of $ETHE, you should receive 1,000 shares of mini $ETH.”

Source: X/James Seyffart

The same would apply to its Mini Bitcoin Trust (BTC). Thus, in terms of the quantity of shares, holders will receive an amount equivalent to what they had before the split.

There would, however, be a crucial difference from an evaluation point of view. SeyffartThe value of the holders on the Mini would be 10% of the initial value held before the split.

“But from a value perspective, let’s say a theoretical person has $1,000 in ETHE or GBTC. Once the splits are done, it should essentially be $900 in the original fund and $100 in the new mini ETFs.”

The above distributions will only be extended to users who held original ETHE or GBTC fund shares prior to July 18 or 30, respectively.

Interestingly, this deadline or registration date, particularly for ETHE, caused the fund to drop by almost 10% to match the distribution schedule.

“The reference date is why we saw a drop in the trading price of $ETHE yesterday at the start of trading. This corresponds to the value of the $ETH shares that will be distributed next week.”

Source: X/James Seyffart

Seyffart added that a similar move can be expected for GBTC on July 30.

Will Mini ETFs Stop Grayscale’s Outflows?

Since launching its spot BTC ETFs, Grayscale’s GBTC has seen over $18 billion in total outflows, despite rivals like Black rock generating massive flows.

GBTC maintains the highest fees, just like its ETHE, and this can be attributed to one of the factors of the outflows. However, some analysts believe that Mini ETFs could reverse this exit trend.

At press time, Grayscale’s ETHE had approximately $9.2 billion in net assets. It remains to be seen whether ETH will hold these assets with the Mini Ethereum Trust (ETH) in place.

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