Grayscale's mini ether ETF could cost less than a Big Mac
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Grayscale Investments' mini ether ETF is set to trade on major exchanges Tuesday, and could price at less than a McDonald's Big Mac.
Why it matters: The Grayscale Ethereum Mini Trust (ETH) is designed to beckon at retail investors.
- Each share of the mini — which is separate from Grayscale's main ether ETF, the Grayscale Ethereum Trust (ETHE) — will offer a fraction of the underlying ether relative to its big brother fund, making its price also a sliver by comparison.
Zoom in: The current price of ETHE — soon to be converted into Grayscale's main ETF — suggests the opening price for the mini would be roughly $3.
- Of course if Ethereum's native coin doubles overnight, the fund's share price would double too.
- The mini is being launched with a spinout of 10% of ETHE's assets, which were priced as of last Wednesday's close.
Between the lines: Every holder of ETHE will receive a proportional share of the mini on Tuesday. After that, investors can buy and sell shares in either fund.
Our thought bubble: A lower buy-in is likely to be a hit with retail investors, who appear to have largely driven the billions of inflows into bitcoin ETFs.
- Robinhood and other fintech platforms already do this, offering fractional shares of stocks and ETFs.
What we're watching: Grayscale might fare better in the ether ETF races than it did with its bitcoin fund, GBTC, which was hammered with outflows and eventually ceded its throne as the largest of such funds.
- It helps that the mini ether ETF will charge nothing initially, and then 0.15% after 6 months, or until $2 billion in assets under management has been reached.
