Grayscale Ethereum Trust Announces Plan On Splitting Shares

Jafrin  |  Dec 3, 2020

Grayscale Investments has announced splitting its shares of its Ethereum Trust Fund (ETHE) later in the month. This will create eight shares for each currently held shares. This means that investors who are currently holding shares in Grayscale will receive 8 additional shares. This will slash the price of each share making it cheaper for retail investors. However, this won't affect the total value of funds. The move intends to increase liquidity thereby increasing affordability of the shares. This is often seen as a bullish move in terms of traditional equities.

Grayscale Splits Ethereum Shares

The shares of Grayscale Ethereum Trust (ETHE) aims to increase exposure to the native Ether cryptocurrency for institutional investors.

As per the official press release, the share split will be implemented on Dec. 17. For investors to be eligible for the share split, investors need to be on the shareholder record by Dec. 14.

ETHE has currently 29.5 million shares, each share representing ownership of 0.09284789 ETH. With the stock split, there will be shares of 265.5 million ETHE, each representing a value of 0.01031643 ETH, a ninth of its current value.

Additionally, the press release also highlighted:

Shareholders are not required to take any action to receive the Shares in connection with the Share Split and they will not be required to surrender or exchange their Shares in the Trust. The transfer agent will automatically issue the new Shares in the Share Split.

Grayscale Had Previously Split Its Shares

The shares of ETHE are currently at $109.10, up by $0.11. The yearly increase of ETHE rose by over 35%, in line with the price of ETH going up by 350%.

Grayscale Investments had split its shares before too. In Jan 2018, when Bitcoin went on a downwards crash, the investment firm had split its shares by 91 to 1, signifying an extra 91 shares for investors. At that time, the market capitalization of Grayscale was worth $3.19 billion. The current market capitalization of the investment firm stands at $12.8 billion.

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