Why Is BlackRock Reverse Splitting Its Ethereum ETF?

BlackRock will execute a 1-for-3 reverse split for its spot Ethereum ETF on October 6, with no change to investor ownership or fund value.

• Analyst Eric Balchunas said the move could cut ETHA's trading spread from 7 bps to about 2 bps.
• BlackRock’s ETHA, with over $5 billion in assets under management, remains the largest U.S. spot Ether ETF, while Ethereum traded near $1,871.
• Reverse splits reduce the share count and raise the share price without altering fund value.

The largest Ethereum ETF is getting a new share structure. BlackRock has announced plans to implement a 1-for-3 reverse share split for its spot Ethereum exchange-traded fund (ETHA), which will cut the number of shares outstanding and boost the price of each share without affecting the fund’s net asset value or investors’ proportional ownership. An analyst however believes that this move could narrow the trading spreads and improve liquidity for the spot Ether ETF.

Why BlackRock Is Reverse Splitting ETHA 

The filing was submitted to the U.S. Securities and Exchange Commission (SEC) on Tuesday and will take effect on October 6. Every three old shares will be converted into one new share, and both the total net assets and the proportional ownership of all investors will remain unchanged.