BlackRock To Triple ETHA’s Share Price With Reverse Split: Here’s What Investors Need To Know

• 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. 

While BlackRock didn't provide a reason for the move, Bloomberg Senior ETF Analyst Eric Balchunas said on X that it is expected to significantly narrow the ETF’s trading spread. He added that the price of ETHA will go from $14 to $42. 

Analyst Says Tighter Trading Spreads Could Benefit Investors 

Balchunas wrote, “Gotta love how ETF issuers consider a 7bp spread a PROBLEM and is adjusting to cut it to 2bps, meanwhile the crypto exchanges charge like 140bps. It's a different world up in here).”

ETHA’s price was down over 0.14% in pre-market trade. On Stocktwits, retail sentiment around ETHA remained in the ‘bearish’ zone, while chatter stayed at ‘normal’ levels over the past day.

ETHA Leads Spot Ethereum ETF Inflows

BlackRock’s Ethereum Trust, with over $5 billion in assets under management (AUM), is the biggest U.S. spot Ether ETF by AUM, as per Sosovalue. As of Tuesday, BlackRock’s ETHA led the way with $42.46 million of inflows in a single day, followed by Fidelity’s FETH at $9.34 million, Bitwise’s ETHW at $1.34 million, and Morgan Stanley’s MSSE with $605,210.

Ethereum’s price was trading at $1,871, up over 0.3% in the last 24 hours. On Stocktwits, retail sentiment around ETH remained in the ‘bearish’ zone, while chatter stayed at ‘normal’ levels over the past day. 

What Is A Reverse Stock Split?

A reverse share split converts multiple existing shares into fewer shares with higher prices. Unlike a regular stock split, which increases the number of shares and decreases the price per share, a reverse split lowers the number of shares and increases the share price.  

Companies and funds generally use reverse splits to achieve greater trading efficiency, meet exchange listing requirements, or make shares more attractive to institutional investors without changing the underlying value of the asset.

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