Item 5. Market for Registrant’s Common Equity
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information
On July 23, 2024, the Shares commenced trading on NASDAQ under the ticker symbol ETHA.
Holders
As of December 31, 2025, there were approximately 133 DTC participating shareholders of record of the Trust. Because most of the Trust’s Shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders.
Dividends
The Trust did not declare any cash distributions to Shareholders during the fiscal year ended December 31, 2025 and the period from May 21, 2024 (Date of Seeding) to December 31, 2024. The Trust has no obligation to make periodic distributions to Shareholders.
Use of Proceeds from Registered Securities
Not applicable.
Purchases of Equity Securities by the Issuers and Affiliated Purchaser
136,880,000 Shares (3,422 Baskets) were redeemed during the fourth quarter of the year ended December 31, 2025.
Period
Total Number of Shares
Redeemed
Average Price
Paid Per Share
10/01/25 to 10/31/25
34,960,000
$
30.3205
11/01/25 to 11/30/25
62,000,000
23.7587
12/01/25 to 12/31/25
39,920,000
22.2370
Total
136,880,000
$
24.9908
Item 6. [Reserved]
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.
This information should be read in conjunction with the financial statements and notes to financial statements included with this report. The discussion and analysis that follows may contain statements that relate to future events or future performance. In some cases, such forward-looking statements can be identified by terminology such as “ may, ” “ should, ” “ could, ” “ expect, ” “ plan, ” “ anticipate, ” “ believe, ” “ estimate, ” “ predict, ” “ potential ” or the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. These statements are based upon certain assumptions and analyses made by the Sponsor on the basis of its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. Whether or not actual results and developments will conform to the Sponsor ’ s expectations and predictions, however, is subject to a number of risks and uncertainties, including the special considerations discussed below, general economic, market and business conditions, changes in laws or regulations, including those concerning taxes, made by governmental authorities or regulatory bodies, and other world economic and political developments. Although the Sponsor does not make forward-looking statements unless it believes it has a reasonable basis for doing so, the Sponsor cannot guarantee their accuracy. Except as required by applicable disclosure laws, neither the Trust nor the Sponsor is under a duty to update any of the forward-looking statements to conform such statements to actual results or to a change in the Sponsor ’ s expectations or predictions.
Introduction
The Trust is a Delaware statutory trust. The Trust does not have any officers, directors, or employees, and is administered by the Third Amended and Restated Trust Agreement dated as of July 8, 2025, among the Sponsor, the Trustee and the Delaware Trustee. The Trust issues Shares representing fractional undivided beneficial interests in its net assets. The assets of the Trust consist primarily of ether held by a custodian on behalf of the Trust.
The Trust is a passive investment vehicle and seeks to reflect generally the performance of the price of ether. The Trust seeks to reflect such performance before payment of the Trust’s expenses and liabilities. The Trust does not engage in any activities designed to obtain a profit from, or ameliorate losses caused by, changes in the price of ether.
The Trust issues and redeems Shares only in Baskets of 40,000 Shares or integral multiples thereof, based on the quantity of ether attributable to each Share (net of accrued but unpaid Sponsor’s Fee and any accrued but unpaid expenses or liabilities). Baskets may be redeemed by the Trust in exchange for the cash proceeds from selling the amount of ether corresponding to their redemption value.
Shares of the Trust trade on NASDAQ under the ticker symbol ETHA.
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Valuation of Ether; The CF Benchmarks Index
On each Business Day, as soon as practicable after 4:00 p.m. ET, the Trust evaluates the ether held by the Trust as reflected by the CF Benchmarks Index and determines the net asset value of the Trust and the NAV. For purposes of making these calculations, a Business Day means any day other than a day when NASDAQ is closed for regular trading.
The CF Benchmarks Index is calculated as of 4:00 p.m. ET. The CF Benchmarks Index is designed based on the IOSCO Principles for Financial Benchmarks and is a Registered Benchmark under the UK BMR. The Index Administrator is a UK incorporated company, authorized and regulated by the FCA of the UK as a Benchmark Administrator, under the UK BMR.
Liquidity
The Trust is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to its liquidity needs. In exchange for a fee, the Sponsor has agreed to assume most of the expenses incurred by the Trust. As a result, the only ordinary expense of the Trust during the period covered by this report was the Sponsor’s Fee. The Trust’s only source of liquidity is its sales of ether.
Critical Accounting Policies
The financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements relies on estimates and assumptions that impact the Trust’s financial position and results of operations. These estimates and assumptions affect the Trust’s application of accounting policies. A description of the valuation of ether, a critical accounting policy that the Trust believes is important to understanding its results of operations and financial position, is provided in the section entitled “Valuation of Ether; The CF Benchmark Index,” above. In addition, please refer to Note 2 to the financial statements included in this report for further discussion of the Trust’s accounting policies.
Valuation of Ether
The following chart shows the daily ether price, as applicable, for the period from June 24, 2024 (Date of Commencement of Operations) through December 2025:
Ether Prices (June 2024 - December 2025)
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Results of Operations
The Year Ended December 31, 2025
The Trust’s net asset value increased from $3,571,262,167 at December 31, 2024 to $10,300,756,520 at December 31, 2025, a 188.43% increase. The increase in the Trust’s net asset value resulted primarily from an increase in the number of outstanding Shares, which rose from 141,480,000 at December 31, 2024 to 458,720,000 at December 31, 2025, a consequence of 546,320,000 Shares (13,658 Baskets) being created and 229,080,000 Shares (5,727 Baskets) being redeemed during the year. The increase in the Trust’s net asset value was partially offset by a decrease in the price of ether, which fell 10.86% from $3,333.60 at December 31, 2024 to $2,971.55 at December 31, 2025.
The 11.01% decrease in the NAV for purposes of the Trust’s periodic financial statements (“Financial Statement NAV”) from $25.24 at December 31, 2024 to $22.46 at December 31, 2025 is directly related to the 10.86% decrease in the price of ether. The Financial Statement NAV decreased slightly more than the price of ether on a percentage basis due to the Sponsor’s Fee, which was $18,411,090 for the year, or 0.23% of the Trust’s average weighted assets of $8,063,917,630 during the year.
The Financial Statement NAV of $36.46 on August 22, 2025 was the highest during the year, compared with a low of $11.09 on April 8, 2025.
Net decrease in net assets resulting from operations for the year ended December 31, 2025 was $2,315,493,008, resulting from an unrealized loss on investment in ether of $2,262,771,767, a net investment loss of $18,411,090, and a net realized loss of $195,777,445 from ether sold for the redemption of Shares, partially offset by a net realized gain of $135,453 from ether sold to pay expenses, and a net realized gain of $161,331,841 from ether paid for the in-kind redemption of shares. Other than the net Sponsor’s Fee of $18,411,090, the Trust had no expenses during the year.
The Period from May 21, 2024 (Date of Seeding) to December 31, 2024
On May 21, 2024, the Seed Capital Investor, an affiliate of the Sponsor, subject to conditions, purchased the Seed Creation Baskets, comprising 400,000 Shares at a per Share price equal to $25.00. Total proceeds to the Trust from the sale of the Seed Creation Baskets were $10,000,000. On June 24, 2024, the Trust purchased approximately 3,031 ether with the proceeds of the Seed Creation Baskets using the Prime Execution Agent. With the above transaction on June 24, 2024, the Trust commenced operations and the Sponsor’s Fee started accruing daily at an annualized rate equal to 0.25% of the net asset value of the Trust.
The 0.96% increase in the Financial Statement NAV from $25.00 at May 21, 2024 (Date of Seeding) to $25.24 at December 31, 2024 is directly related to the 1.03% increase in the price of ether. The Financial Statement NAV increased slightly less than the price of ether on a percentage basis due to the net Sponsor’s Fee, which was $888,986 for the period, or 0.08% of the Trust’s average weighted assets of $1,087,092,372 during the period.
The NAV of $30.86 on December 6, 2024 was the highest during the period, compared with a low of $16.85 on September 6, 2024.
The increase in the Trust’s net asset value resulted primarily from an increase in the number of outstanding Shares, which rose from 400,000 Shares at May 21, 2024 to 141,480,000 Shares at December 31, 2024, a consequence of 147,280,000 Shares (3,682 Baskets) being created and 6,200,000 Shares(155 Baskets) being redeemed during the period. The increase in the Trust’s net asset value also benefited from an increase in the price of ether, which rose 1.03% from the Trust’s first ether purchase of $3,299.54 on June 24, 2024 to $3,333.60 at December 31, 2024.
Net increase in net assets resulting from operations for the period ended December 31, 2024 was $34,418,803, resulting from an unrealized gain on investment in ether of $27,767,502 and a net realized loss of $22,070 from ether sold to pay expenses and a net realized gain of $7,562,357 from ether sold for the redemption of Shares. Other than the net Sponsor’s Fee of $888,986, the Trust had no expenses during the period.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.