Grayscale Ethereum Mini Trust, Key Spinoff Concerns Addressed

The plans to spinoff Grayscale Ethereum Trust to a Mini Trust comes with so much complications with James Seyffart providing clarity
By Godfrey Benjamin
July 20, 2024
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Highlights

  • Grayscale Mini Trust spinoff is one of the most important trends at the moment
  • The product comes with numerous questions from curious potential investors
  • James Seyffart, Bloomberg Analyst has shared insight on what to expect

After Grayscale announced the fee slash for its Ethereum Trust spinoff to an Ethereum Mini Trust ETF, some crypto enthusiasts are curious to know more about the product. Quite a number of people are concerned about how it would operate, considering that it is a new shift.

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Mechanics For Grayscale Mini Trusts

James Seyffart, a Senior Bloomberg ETF Analyst, took out time to explain the mechanics of the new Grayscale product. He noted that it would essentially be the same for the Grayscale Bitcoin Trust and BTC Mini Trust ETF. That is, if you own 1,000 shares of ETHE, you should receive 1,000 shares of mini ETH. This is from a share point but from a value point of view, it is quite different.

A person who has $1,000 in ETHE or GBTC, will end up with $900 in the original fund and $100 in the new mini ETFs after the spinoffs.

Markedly, July 18 was initially announced as the record date for the first issuance and distribution of shares of the new Grayscale Ethereum Mini Trust. However, it has now been rescheduled for July 23 while the spinoff for GBTC to BTC Trust is scheduled to happen on July 31 as earlier announced.

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Grayscale BTC And ETH Mini Trusts Share Distribution

As a criteria for share distribution, Seyffart stated that one had to be the owner for those shares on the record date. He went on to say the record date was the reason for the drop in ETHE trading price on Thursday when trading commenced. Seyffart believes that GBTC will follow similar trend when its spin off happens in about two weeks.

According to the ETF Analyst, ETHE has a current market value of $29. “Theoretically the $ETH shares would hit your brokerage accounts at a much lower handle (price per share) because you are getting an equivalent number of shares in the new fund but its 1/10th of the value of your original position. Somewhere around $2-$3 per share?”

He says the same applies to GBTC which has a current value of $59 per share. The BTC Trust should trade between $5-$6 per share based on the trading price as of today.

Meanwhile, the sponsor fee for both the Grayscale Bitcoin Mini Trust and the Ethereum Mini Trust has been fixed at 0.15%. This makes the duo the cheapest crypto ETF products in the market to date.

Read More: Telegram To Launch Web3-Enabled Mini App Store, Here’s All

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Godfrey Benjamin
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture. Follow him on X, Linkedin
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.