Reverse split aims to tighten Ethereum ETF trading spreads
BlackRock will execute a one-for-three reverse split of its iShares Ethereum Trust ETF (ETHA) on Oct. 6, combining every three shares into one and lifting the nominal share price to approximately $42 from $14.15, according to an SEC filing approved July 31.
The split will reduce ETHA’s outstanding shares from 384 million to 128 million. BlackRock’s prospectus grants the fund sponsor authority to take such action when it believes the secondary-market price has moved outside a desirable trading range.
Eric Balchunas, an ETF analyst at Bloomberg Intelligence, said the restructuring addresses a cost friction point for retail traders. “ETHA’s bid-ask spread could fall from about seven basis points to roughly two after its share price rises to around $42,” Balchunas stated. At current prices, a one-cent spread represents 0.071% of the share price; after the split, the same one-cent spread would equal 0.024%.
The tighter spread matters in the context of alternative Ethereum exposure routes. Balchunas noted that buying Ethereum directly through Coinbase’s simplified buying service carries a 140 basis point charge, roughly 70 times the projected post-split ETHA spread. A 40 basis point direct trade on a crypto exchange costs about 20 times more than ETHA’s expected spread.
ETHA remains the largest spot Ethereum ETF by net assets at $5.4 billion as of Aug. 4, despite trading at a lower nominal share price than competitors. Grayscale’s Ethereum fund trades at $18 per share, VanEck’s ETHV at $27, and Morgan Stanley’s MSSE at $20.
The reverse split will not alter shareholders’ investment values or reverse the fund’s year-to-date decline. Ethereum’s price has fallen from over $3,200 at the start of the year to around $1,870 as of press time, driving ETHA down 37% year-to-date.
ETHA has attracted more than $11 billion in cumulative net inflows since inception, underscoring demand for regulated Ethereum exposure through brokerage accounts. The fund charges an annual sponsor fee and operates separately from direct crypto purchases, which allow withdrawal, self-custody, or on-chain use.
Oct. 5 is the record date for the split. Trading on a split-adjusted basis begins Oct. 6 on Nasdaq.
