BTC & ETH Reverse Share Splits Are Coming – What You Need to Know

On Friday, November 8, 2024, Grayscale announced our intention to implement a reverse share split for Grayscale® Bitcoin Mini Trust ETF (Ticker: BTC) and Grayscale® Ethereum Mini Trust ETF (Ticker: ETH) as of November 19, 2024 at 5:00 PM ET. So, what’s next, and what will this mean for BTC and ETH shareholders?  We chatted with Grayscale’s Global Head of ETFs, David LaValle, to learn more.

Question: What is a reverse share split? 

• Answer: A reverse share split is when the total shares outstanding of a stock is reduced, resulting in a commensurate increase in the price per share (more here). This is sometimes referred to as a stock consolidation, stock merge, or share rollback. For the purposes of this blog and our efforts, I am going to refer to it as a reverse share split. 

Question: Why does Grayscale intend to implement a reverse share split for BTC and ETH?  

• Answer: Reverse share splits can help make the trading of securities more cost-effective for market participants, and that is what Grayscale intends to do for BTC and ETH. We are constantly looking for ways to evolve our product suite to meet the wants and needs of the investment community. Based on feedback from our clients, we believe this is the right decision and beneficial to our clients and the investment community.

Question: What exactly will happen during this reverse share split? 

• Answer: The reverse share split for BTC and ETH is expected to occur on November 19, 2024 at 5:00 PM ET and will be in effect on the next day of trading on November 20, 2024. 

  For Grayscale® Bitcoin Mini Trust ETF (Ticker: BTC), the split ratio will be 1:5. Therefore, every five pre-split shares of BTC will result in the receipt of one post-split share of BTC, which will be five times higher than the net asset value (“NAV”) per share of a pre-split share. For Grayscale® Ethereum Mini Trust ETF (Ticker ETH), the split ratio will be 1:10. Therefore, every ten pre-split shares of ETH will result in the receipt of one post-split share of ETH, which will be ten times higher than the NAV per share of a pre-split share. An illustration is below. 

  The following table shows the effect of a hypothetical 1:5 reverse split:

For illustrative purposes only

The following table shows the effect of a hypothetical 1:10 reverse split:

For illustrative purposes only

As exemplified above, although the number of shares you own and the NAV per share changes, the total NAV of your shares remains the same. 

After November 19, 2024 at 5:00 PM ET, the first day of trading after effectiveness of  the reverse share splits, both BTC and ETH would continue to trade on NYSE Arca.

Question: As a BTC or ETH shareholder, what actions do I need to take?

• Answer: Shareholders do not need to take any action, as the reverse share split will happen automatically. Importantly, your holdings will remain unchanged.

Question: Where should I go if I have additional questions?

• Answer: If you have any questions or would like further clarification, please don’t hesitate to reach out to speak directly to a member of the Grayscale team. We can be reached at [email protected] or (866)775-0313.  

Grayscale Bitcoin Mini Trust ETF and Grayscale Ethereum Mini Trust ETF (collectively the “Funds”) are not registered under the Investment Company Act of 1940 (the “1940 Act”) and therefore are not subject to the same regulations and protections as 1940 Act registered ETFs and mutual funds. 

Please read the Funds’ prospectuses carefully before investing in the Funds. Foreside Fund Services, LLC is the Marketing Agent for the Funds. 

Digital assets are not suitable for an investor that cannot afford the loss of the entire investment. An investment in the Funds is not a direct investment in Bitcoin or Ether. The Funds are subject to significant risk and heightened volatility. The Funds are not suitable for all investors and an investor may lose all their money.