• ETHE shareholders will receive ETH shares automatically in their investment accounts without needing to take any action or make any payments.
• The ETH Trust, aiming for a listing on NYSE Arca under the ticker “ETH,” will initially be funded by transferring 10% of Grayscale Ethereum Trust’s Ethereum holdings.

Crypto asset management giant Grayscale has recently revealed that the first issuance and distribution of the shares for the Grayscale Ethereum mini-Trust will begin next week from July 18. Thus, it will be a new addition to the firm’s list of crypto investment product offerings. The development comes just as spot Ethereum ETF issuers submitted all the S-1 amendments on Monday, per the CNF update.

As of July 18, Grayscale will initiate the distribution of shares for the Grayscale Ethereum Mini Trust (ETH Trust) to shareholders of Grayscale Ethereum Trust (ETHE). Thus, each ETHE holder would be entitled to receive the shares of ETH trust in proportion to their ETHE holdings.

The press release from Grayscale shows that ETHE will transfer 10% of its Ethereum holdings to the ETH Trust, and on the record date, each ETHE share will be exchanged for an ETH share.

Sponsored by Grayscale, the ETH Trust is a Delaware statutory trust and plans to get listed on the NYSE Arca under the ticker symbol of “ETH” subject to regulatory approval. This aligns with Grayscale’s strategy to broaden the range of crypto investment products and enhance shareholder value.

Earlier this year in April, Grayscale filed for the Ethereum Mini Trust with the plan of funding it initially through the assets of the Grayscale Ethereum Trust. The mini-trust seeks to target long-term investors at a lower fee in comparison to the original ETHE.

The Grayscale Ethereum mini Trust will serve as a strong foundation for seeking a spot Ethereum ETF. As reported by CNF, the spot Ether ETFs will go live for trading next week on July 15.

Mechanism of Distribution for the Grayscale Ethereum Mini-Trust

As per the preliminary information statement on Schedule 14C filed with the U.S. SEC, ETHE shareholders won’t need to take any action or make any payments for the Initial Distribution. Upon satisfying the distribution conditions, each ETHE shareholder will automatically receive the ETH shares in their investment accounts or portfolios.

The Distribution Date will occur after certain conditions are met, including the effectiveness of the ETH Trust’s registration statement on Form 8-A and Form S-1, as well as the approval of the ETH Shares’ listing on NYSE Arca.

The earliest possible Distribution Date is July 19. However, Grayscale has noted that due to legal and procedural factors, there is no guarantee that the initial distribution will occur as scheduled.

Grayscale’s announcement states that the Initial Distribution is likely to be tax-neutral for U.S. federal income tax purposes. The contribution of Ether to the ETH Trust and the distribution of ETH Shares won’t result in taxable income, gain, loss, deduction, credit, or proceeds for ETHE shareholders.

After a steep drop to $2,800 on Monday, the Ethereum price has bounced back above $3,000. As of press time, the ETH price is trading up 5.5% in the last 24 hours at $3,072. Once the spot Ethereum ETF goes live, ETH is likely to outperform Bitcoin, as per analysts’ expectations.