BlackRock Prepares $5B Ethereum ETF for October Reverse Split

BlackRock's iShares Ethereum Trust ETF (ETHA) is set to undergo a 1-for-3 reverse split on October 6, which will reduce the number of outstanding shares and raise the trading price per share. This move is intended to improve cost efficiency for investors by tightening trading spreads and reducing the bid-ask spread from 7 basis points to around 2 basis points, according to Eric Balchunas, Bloomberg's Senior ETF Analyst.

The reverse split will combine every three existing shares of ETHA into a single share, leaving the fund's net assets intact. This means that while the per-share net asset value will rise proportionally, the total value of any shareholder's position and the fund's overall assets under management, which stood at over $5 billion as of early August, will remain unchanged.

ETHA is currently the largest Ethereum-based ETF trading, with Grayscale's Ethereum fund holding the second-largest position in the category. The reverse split does not impact BlackRock's separate staking fund, the iShares Staked Ethereum Trust ETF.