Grayscale to Distribute Ethereum Mini ETF Shares in July 2024

Grayscale Investments has announced a significant milestone in its product offerings with the introduction of the Grayscale Ethereum Mini Trust. On July 18, 2024, the company will initiate the first issuance and distribution of shares for this new trust, marking a pivotal expansion in the realm of crypto investments.

Grayscale Ethereum Mini Trust Distribution Details

On the designated record date of July 18, 2024, shareholders of the Grayscale Ethereum Trust (ETHE) will receive shares of the new Grayscale Ethereum Mini Trust (ETH Trust). This distribution will see 10% of ETHE’s Ether holdings transferred to the ETH Trust. For each ETHE share held by shareholders at 4:00 PM ET on the record date, one ETH Trust share will be allocated.

The ETH Trust, a Delaware statutory trust sponsored by Grayscale, aims to list its shares on the NYSE Arca under the ticker symbol “ETH,” pending regulatory approval. This strategic move aligns with Grayscale’s broader goal of diversifying its investment products and enhancing value for its shareholders.

Distribution Mechanism and Conditions

According to the preliminary information statement filed with the Securities and Exchange Commission (SEC), ETHE shareholders are not required to take any action or make any payment to receive the ETH Trust shares. The distribution will be automatic, contingent on several regulatory approvals, including the effectiveness of ETH Trust’s registration statements and the listing approval from NYSE Arca.

While the earliest possible distribution date is set for July 19, 2024, Grayscale cautions that legal and procedural factors could affect the timeline, and there is no absolute assurance that the distribution will occur as planned.

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Strategic Implications for ETHE Shareholders

The creation of the ETH Trust signifies a noteworthy development for ETHE shareholders. Post-distribution, on July 18, 2024, ETHE shares will trade without the right to receive ETH Trust shares, marking an “Ex-Distribution Date.” Consequently, shareholders will observe both ETHE shares and ETH Trust shares in their investment accounts.

Grayscale’s move to establish the Ethereum Mini Trust comes amid various strategic initiatives aimed at expanding its product line and adapting to the evolving regulatory landscape. In April, Grayscale applied to create the Ethereum Mini Trust, intending it for long-term investors with lower fees compared to the original ETHE.

Filing and Regulatory Pursuits

Grayscale has been proactive in seeking regulatory approvals for its crypto investment products. Recently, the firm amended its 19b-4 filing for the Ethereum Mini Trust, a significant step towards launching a spot Ethereum ETF. This effort aligns with the broader market push to secure approvals for spot cryptocurrency ETFs, reflecting the growing interest in digital asset investments.