BlackRock's ETHA Ethereum ETF to execute 1-for-3 reverse split in October

BlackRock's spot Ethereum ETF will consolidate every three ETHA shares into one on Oct. 6, lifting the fund's per-share net asset value.

Bloomberg Senior ETF Analyst Eric Balchunas said the adjustment will cut trading costs to about 2 basis points from 7 basis points, adding that ETF issuers treat even modest friction as a problem.

The move does not change the total value of investors' holdings or the fund's assets under management, which exceed $5 billion. ETHA trades near $14, down about 40 percent year-to-date, mirroring weakness in Ethereum. The higher per-share price narrows the bid-ask spread to roughly 2 basis points from about 7.

The split highlights how ETF issuers treat trading friction as a core problem while crypto exchanges routinely post spreads near 140 basis points. The adjustment takes effect Oct. 6, with no change to the fund's underlying exposure.

BlackRock disclosed the plan in a filing with the U.S. Securities and Exchange Commission, according to The Block. The reverse split is a mechanical action that consolidates three existing shares into one, raising the net asset value per share without altering the total value of shareholder positions.

The move comes as BlackRock's Ethereum product competes with a crowded field of spot crypto ETFs, including its own iShares Bitcoin Trust (IBIT) and rivals from Fidelity and Bitwise. The higher share price and tighter spreads aim to make ETHA more attractive to institutional investors who trade in larger blocks.

Institutional interest in yield-bearing Ethereum funds has grown. Italy's Intesa Sanpaolo, the country's largest bank, tripled its stake in BlackRock's iShares Staked Ethereum Trust last quarter while cutting its IBIT holding by 93.7 percent, its Form 13F shows. Trading firm Jane Street also nearly doubled its ETHA stake in the first quarter.

The adjustment also feeds into a broader debate over execution efficiency between regulated ETFs and native crypto venues. While ETHA's spread narrows to about 2 basis points, crypto exchanges routinely quote costs near 140 basis points, a gap that has widened as institutional money flows into spot products.

For investors, the split is administrative rather than a directional bet on Ethereum's price. The fund's total assets under management, exceeding $5 billion, remain unchanged, and the underlying ETH exposure is untouched. The key date to watch is Oct. 6, when the consolidation takes effect and the new per-share price of about $42 begins trading.

This article is for informational purposes only and does not constitute investment advice.