What You Need to Know About Spin-Offs

Last Update 07/08/2024

What do we mean by “spin-off”? 

While “spin-off” (or “spinout”) can mean different things in business and investing, we use the term to refer to a portion of a larger product being moved or “spun out” to create a smaller product. 

This simply means that a portion of the tokens underlying the shares of a larger product will be used to seed a new and potentially lower-cost product — i.e., a spin-off fund. Following a spin-off, both the original and the new funds will trade independently, providing investors with more options to suit their individual needs.

To learn more about the mechanics of the spin-off process, check out this short video:



How would a spin-off affect me?

A spin-off will affect all shareholders of an original fund at the close of business on the publicly announced record date.

If you are a shareholder, you will automatically receive one share of the spin-off fund for each share of the original fund, and your account will reflect your updated ownership of shares of both funds. The total value of the assets underlying your investment won’t change. In some cases, you will automatically benefit from a lower blended fee, given the spin-off fund’s lower expense ratio.

What would I need to do?

Nothing! If Grayscale announces a spin-off, you won’t need to take any action. The distribution of shares will be automatic as of the announced distribution date, though it may take several days after that date for you to see the new shares in your investment account.

Why would we conduct a spin-off?

Spinning off part of a larger product is intended to give investors greater choice: between a lower-fee product and a product with greater liquidity and a longer track record. As the world’s largest crypto-focused asset manager*, we understand how important it is to you to gain exposure to crypto funds in multiple ways.

*As of 6/28/2024


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