The record date for the initial distribution of its new mini Ethereum ETF shares is July 18, 2024, as Grayscale expands its crypto investment options.
Grayscale Investments, a crypto asset management firm, has disclosed the record date for the initial issuance and distribution of shares in its new Grayscale Ethereum Mini Trust. The firm’s list of crypto investment products will be expanded by this action, scheduled for July 18, 2024. It is anticipated that existing shareholders will be impacted.
Grayscale Allocation Date for ‘Mini’ Ethereum ETF
Grayscale Investments has designated July 18, 2024, as the record date for the initial creation and distribution of Grayscale Ethereum Mini Trust (ETH Trust) shares to Grayscale Ethereum Trust (ETHE) shareholders. Each ETHE shareholder will be entitled to receive shares of the ETH Trust in proportion to their ETHE holdings as a result of this Initial Distribution.
ETHE will exchange one ETH Share for each ETHE share held at 4:00 PM ET on the Record Date, and 10% of its Ether holdings will be transferred to the ETH Trust.
ETH Trust, a Delaware statutory trust sponsored by Grayscale, seeks to be listed on the NYSE Arca under the ticker symbol “ETH” and is subject to regulatory approval. This is consistent with Grayscale’s current strategy of increasing shareholder value and expanding the available rates of crypto investment products.
Mechanism and Conditions
The Initial Distribution does not necessitate payment or action from ETHE shareholders, as indicated in the provisional information statement on Schedule 14C submitted to the Securities and Exchange Commission (SEC). Each shareholder of ETHE will automatically receive ETH Shares in their portfolios or investment accounts upon fulfilling the distribution conditions.
After the effective registration statement of ETH Trust on Form 8-A and Form S-1 and the sanction of NYSE Arca for listing the ETH Shares are met, the Distribution Date will occur.
Consequently, the 19th day of July is designated as the earliest potential Distribution Date. Nevertheless, Grayscale acknowledged that the initial distribution cannot be guaranteed to occur as anticipated due to legal and procedural factors.
Grayscale Filing for Grayscale Ethereum Mini Trust
This development results from a series of strategic initiatives that Grayscale has implemented to expand its product line and adapt to the evolving legal landscape.
Grayscale applied in April to establish the Grayscale Ethereum Mini Trust, which will initially finance the assets of the Grayscale Ethereum Trust. This is intended for long-term investors and will impose lower fees than the original ETHE.
Grayscale has already initiated the process of obtaining licenses for its crypto investment products. The firm has submitted an amendment to the 19b-4 filing for the Ethereum Mini Trust in the past few months, which is significant for the launch of the spot Ethereum ETF. This effort is in response to the broader market initiative to obtain approval for spot cryptocurrency ETFs, which results from the growing interest in digital asset investment vehicles.
Effects on ETHE Shareholders
The establishment of the ETH Trust is a substantial development for ETHE shareholders. ETHE shares will trade without the opportunity to receive ETH Shares as of July 18, 2024, marked as a “Ex-Distribution Date.”
Shareholders will effortlessly observe ETHE and ETH Shares in their investment accounts after the initial distribution.
Grayscale’s announcement suggests that the Initial Distribution is anticipated to be tax-neutral for U.S. federal income tax purposes. Nevertheless, it is not expected that the contribution of Ether to the ETH Trust or the distribution of ETH Shares will result in taxable income, gain, loss, deduction, credit, or proceeds for ETHE shareholders.