Leading crypto asset manager Grayscale commended Bloomberg ETF analyst James Seyffart’s comprehensive insight on its upcoming ETF spin-offs.
In a recent post on X, Seyffart explained the upcoming spin-offs involving Grayscale’s Ethereum and Bitcoin mini ETFs. Seyffart’s insights clarified the creation of a mini Ethereum ETF (ETH) from Grayscale’s Ethereum Trust (ETHE) via a spin-off.
According to Seyffart, the creation of these mini ETFs will follow the same procedure for both Ethereum and Bitcoin. Investors holding shares of Grayscale’s Ethereum Trust will receive an equal number of shares in the new mini ETH fund.
This distribution is scheduled for July 23 for Grayscale Ethereum Trust and July 31 for Grayscale Bitcoin Trust. Importantly, investors need to be owners of record on the specified dates—July 18 for ETHE and July 30 for GBTC—to receive the new shares.
Impact on Trading Prices
Notably, the spin-off mechanism has already impacted trading prices. Seyffart noted that the recent drop in ETHE’s price was directly linked to the upcoming share distribution, with a similar pattern expected for GBTC on July 30.
Currently, ETHE trades at around $29 per share, while GBTC trades at around $59 per share. Post-spin-off, the new mini shares of ETH and BTC are expected to trade at lower prices, approximately $2-$3 for the ETH mini ETF and $5-$6 for the BTC mini ETF, reflecting the division of the original fund’s value.
Amid the update from the Bloomberg ETF analyst, Grayscale took to X to acknowledge the accuracy of the information and praise Seyffart.
We like this thread by @JSeyff explaining the creation of $ETH from $ETHE via a spin-off. You can expect the same to happen with the creation of $BTC from $GBTC. https://t.co/iVJIR1YPHf
— Grayscale (@Grayscale) July 30, 2024
Automatic Share Distribution
Grayscale emphasized that investors do not need to take any action to receive the new shares. The distribution will occur automatically, with shares reflecting in accounts shortly after the announced dates. This move aims to offer investors a choice between a lower-fee product and a fund with greater liquidity and a more extended track record.
This spin-off initiative follows Grayscale’s launch of the two spot Ethereum products on NYSE Arca, further expanding its product portfolio.
However, since these Ethereum spot ETFs commenced trading last Tuesday, ETHE has not seen positive flows. Instead, it has been drained of $1.84 billion under seven days of trading. On the other hand, the mini ETF “ETH” has seen a cumulative of $181 million in inflow.
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