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Item 7. Management’s Discussion and Analysis

2025-02-28 compared with 2024-02-23 · 699 added, 463 removed, 607 unchanged (66% of the section changed)

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The Trust is a passive entity that is managed and administered by the Sponsor and does not have any officers, directors or employees.

The Trust holds ETH and, from time to time on a periodic basis, issues Creation Baskets in exchange for deposits of ETH.

As a passive investment vehicle, the Trust’s investment objective is for the value of the Shares (based on ETH per Share) to reflect the value of ETH held by the Trust, determined by reference to the Index Price, less the Trust’s expenses and other liabilities.

While an investment in the Shares is not a direct investment in ETH, the Shares are designed to provide investors with a cost-effective and convenient way to gain investment exposure to ETH.

To date, the Trust has not met its investment objective and the Shares quoted on OTCQX have not reflected the value of ETH held by the Trust, less the Trust’s expenses and other liabilities, but instead have traded at both premiums and discounts to such value, which at times have been substantial.

The Trust holds Ether and, from time to time on a periodic basis, issues Creation Baskets in exchange for deposits of Ether.

On July 22, 2024, in connection with the approval of application under Rule 19b-4 of the Securities Exchange Act of 1934 on May 23, 2024 and the effectiveness of the registration statement on Form S-3, as amended (File No.

333-278880), the Sponsor authorized the commencement of a redemption program.

Shares of the Trust began trading on NYSE Arca on July 23, 2024, following the effectiveness of the Trust’s registration statement on Form S-3, as amended.

The Trust issues Shares only in one or more blocks of 10,000 Shares (a block of 10,000 Shares is called a “Basket”) to certain Authorized Participants from time to time.

Baskets are offered in exchange for Ether.

Through its redemption program, the Trust redeems Shares from Authorized Participants on an ongoing basis.

As a passive investment vehicle, the Trust’s investment objective is for the value of the Shares (based on Ether per Share) to reflect the value of Ether held by the Trust, determined by reference to the Index Price, less the Trust’s expenses and other liabilities.

While an investment in the Shares is not a direct investment in Ether, the Shares are designed to provide investors with a cost-effective and convenient way to gain investment exposure to Ether.

The Trust will not utilize leverage, derivatives or any similar arrangements in seeking to meet its investment objective.

Historically, the Trust has not met its investment objective and, prior to their uplisting to NYSE Arca on July 23, 2024, the Shares quoted on OTCQX did not reflect the value of Ether held by the Trust, less the Trust’s expenses and other liabilities, but instead traded at both premiums and discounts to such value, which at times were substantial, although the Sponsor has observed that the Trust has begun to meet its investment objective more closely following the uplisting of the Shares to NYSE Arca.

The Trust is not managed like a business corporation or an active investment vehicle.

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(2) Includes Cede & Co.

as nominee for DTC for the Shares traded on OTCQX, but not its direct participants.

Therefore, this number does not include the individual holders who have bought/sold Shares on OTCQX or transferred their eligible Shares to their brokerage accounts.

The Ethereum Network operates using open-source protocols, meaning that any user can download the software, modify it and then propose that the users and miners or validators, as applicable, of ETH adopt the modification.

When a modification is introduced and a substantial majority of users and validators consent to the modification, the change is implemented and the network remains uninterrupted.

However, if less than a substantial majority of users and validators consent to the proposed modification, and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a “hard fork” of the Ethereum Network, with one group running the pre-modified software and the other running the modified software.

The effect of such a fork is the existence of two versions of ETH running in parallel, yet lacking interchangeability.

Holders of ETH on the original Ethereum Network, at the time the block is validated and the fork occurs, can then also receive an identical amount of new tokens on the new network.

Ethereum Fork on September 15, 2022 (ETHPoW)

Background and Measurement

The Ethereum Network completed the final stages of an upgrade referred to as the “Merge,” which is a stage of what was previously referred to as Ethereum 2.0, on September 15, 2022, and the Ethereum Network transitioned to a proof-of-stake model.

Following the Merge, a hard fork of the Ethereum Network occurred, as certain ETH miners and network participants planned to maintain the proof-of-work consensus mechanism that was removed as part of the Merge.

This version of the Ethereum Network was rebranded as Ethereum Proof-of-Work (“ETHPoW”).

Immediately following the hard fork on September 15, 2022, holders of ETH passively received Incidental Rights to an equal number of ETHPoW.

At that time, the Trust held approximately 3,059,976 ETH and the newly created ETHPoW was inaccessible to

On the date of the hard fork, the Incidental Rights to ETHPoW were determined to have no value as there were insufficient observable market inputs to determine the fair value of ETHPoW and the ETHPoW assets were not supported by the Custodian.

Furthermore, on September 16, 2022, the Sponsor of the Trust announced that it had declared a distribution and established a record date for the distribution of the Incidental Rights to the shareholders of record as of the close of business on September 26, 2022 (“Record Date Shareholders”).

Subsequent Measurement and Distribution of Incidental Rights to ETHPoW

On September 26, 2022 (the “Record Date”), the Trust distributed the Incidental Rights to obtain approximately 3,059,976 ETHPoW tokens held by the Trust to the Record Date Shareholders.

On the Record Date, the Trust, acting on behalf of the Record Date Shareholders and pursuant to the terms of the Trust Agreement governing the Trust, appointed Grayscale Investments, LLC as agent (in this capacity, the “Agent”) on behalf of the Record Date Shareholders and transferred the Incidental Rights to ETHPoW tokens held by the Trust to the Agent on behalf of the Record Date Shareholders.

The Trust has no ownership interest in the distributed Incidental Rights to ETHPoW, no ability to control the actions of the Agent and no right to receive any information about the distributed Incidental Rights to ETHPoW or the disposition thereof or of the underlying ETHPoW from the Record Date Shareholders, their Agent or any other person.

As of the Record Date, the Trust determined such Incidental Rights to have a fair value of $0 and no gain or loss was recognized as part of the Incidental Right distribution, due to the lack of a trading venue accessible to the Authorized Participant of the Trust and uncertainty regarding the ability to safely access and custody the ETHPoW.

On September 18, 2023, the Agent announced that it irrevocably abandoned all of the Incidental Rights to ETHPoW.

The Agent determined that the Custodian does not support ETHPoW, nor have trading venues with meaningful liquidity developed for ETHPoW.

As such, it is not possible to exercise the rights to acquire and sell ETHPoW, and on behalf of the Record Date Shareholders, the Agent abandoned the rights to ETHPoW.

as nominee for DTC for the Shares traded on NYSE Arca, on or after July 23, 2024, or on OTCQX, prior to July 23, 2024, as applicable, but not its direct participants.

Therefore, this number does not include the individual holders who have bought/sold Shares on NYSE Arca, on or after July 23, 2024, or on OTCQX, prior to July 23, 2024, as applicable, or transferred their eligible Shares to their brokerage accounts.

The ETH Trust Distribution

On July 23, 2024, the Trust completed its previously announced pro rata distribution of 310,158,500 shares of Grayscale Ethereum Mini Trust ETF (the “ETH Trust”) to shareholders of the Trust as of July 18, 2024 (the “Record Date”), as described in the Trust’s definitive information statement on Schedule 14C, filed with the SEC on July 18, 2024 (referred to as the “Initial Distribution”).

In connection therewith, on July 23, 2024, the Trust contributed to the ETH Trust an amount of Ether equal to 10% of the total Ether held by the Trust as of the Record Date, equal to 292,262.98913350 Ether, as consideration and in exchange for the issuance of shares of the ETH Trust.

Subject to the limitations and qualifications set forth in the Trust’s definitive information statement on Schedule 14C, filed with the SEC on July 18, 2024 (including with respect to the qualification of both the Trust and the ETH Trust as grantor trusts for U.S.

federal income tax purposes and the proper allocation of existing tax basis between Shares of the Trust and shares of the ETH Trust), it is expected that neither the Trust nor any beneficial owner of the Shares will recognize any gain or loss for U.S.

federal income tax purposes as a result of the Initial Distribution.

Accordingly, it is expected that neither the Trust’s contribution of Ether to the ETH Trust nor the Trust’s distribution of shares in the ETH Trust to shareholders as of 4:00 PM ET on the Record Date will be reported to any beneficial owner of Shares (or to any intermediary holding Shares) as giving rise to income, gain, loss, deduction, credit or proceeds.

Any beneficial owner of Shares who received shares of the ETH Trust in the Initial Distribution, and any intermediary holding Shares of the Trust or shares of the ETH Trust, should consult their own tax advisor regarding the U.S.

federal income tax consequences of the Initial Distribution, including the proper allocation of existing tax basis between Shares of the Trust and shares of the ETH Trust.

Please refer to the Trust’s definitive information statement on Schedule 14C, filed with the SEC on July 18, 2024, for more information, including other U.S.

federal income tax considerations relating to the Initial Distribution and ownership of shares of the ETH Trust.

Critical Accounting Policies and Estimates

Investment Transactions and Revenue Recognition

The Trust considers investment transactions to be the receipt of ETH for Share creations and the delivery of ETH for Share redemptions or for payment of expenses in ETH.

At this time, the Trust is not accepting redemption requests from shareholders.

The Trust considers investment transactions to be the receipt of Ether by the Trust in connection with Share creations and the delivery of Ether by the Trust in connection with Share redemptions or for payment of expenses in Ether.

Prior to July 23, 2024, the Trust was not accepting redemption requests, however the Sponsor has since authorized the commencement of the Trust’s redemption program on July 22, 2024 in connection with the uplisting of the Shares to NYSE Arca.

The Trust records its investment transactions on a trade date basis and changes in fair value are reflected as net change in unrealized appreciation or depreciation on investments.

Realized gains and losses are calculated using the specific identification method.

Realized gains and losses are recognized in connection with transactions including settling obligations for the Sponsor’s Fee in ETH.

Realized gains and losses are recognized in connection with transactions including settling obligations for the Sponsor’s Fee in Ether.

Principal Market and Fair Value Determination

To determine which market is the Trust’s principal market (or in the absence of a principal market, the most advantageous market) for purposes of calculating the Trust’s net asset value in accordance with U.S.

GAAP (“Principal Market NAV”), the Trust follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820-10, which outlines the application of fair value accounting.

ASC 820-10 determines fair value to be the price that would be received for ETH in a current sale, which assumes an orderly transaction between market participants on the measurement date.

ASC 820-10 requires the Trust to assume that ETH is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market.

GAAP (“Principal Market NAV”), the Trust follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820-10, Fair Value Measurement , which outlines the application of fair value accounting.

ASC 820-10 determines fair value to be the price that would be received for Ether in a current sale, which assumes an orderly transaction between market participants on the measurement date.

ASC 820-10 requires the Trust to assume that Ether is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market.

Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact.

The Trust only receives ETH in connection with a creation order from the Authorized Participant (or a Liquidity Provider) and does not itself transact on any Digital Asset Markets.

The Trust only receives Ether in connection with a creation order from the Authorized Participant (or a Liquidity Provider) and does not itself transact on any Digital Asset Markets.

Therefore, the Trust looks to market-based volume and level of activity for Digital Asset Markets.

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In determining which of the eligible Digital Asset Markets is the Trust’s principal market, the Trust reviews these criteria in the following order:

• First, the Trust reviews a list of Digital Asset Markets that maintain practices and policies designed to comply with AML and KYC regulations, and non-Digital Asset Trading Platform Markets that the Trust reasonably believes are operating in compliance with applicable law, including federal and state licensing requirements, based upon information and assurances provided to it by each market.

• Second, the Trust sorts these Digital Asset Markets from high to low by market-based volume and level of activity of ETH traded on each Digital Asset Market in the trailing twelve months.

• First, the Trust reviews a list of Digital Asset Markets that maintain practices and policies designed to comply with anti-money laundering (“AML”) and know-your-customer (“KYC”) regulations, and non-Digital Asset Trading Platform Markets that the Trust reasonably believes are operating in compliance with applicable law, including federal and state licensing requirements, based upon information and assurances provided to it by each market.

• Second, the Trust sorts these Digital Asset Markets from high to low by market-based volume and level of activity of Ether traded on each Digital Asset Market in the trailing twelve months.

• Third, the Trust then reviews pricing fluctuations and the degree of variances in price on Digital Asset Markets to identify any material notable variances that may impact the volume or price information of a particular Digital Asset Market.

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The Trust determines its principal market (or in the absence of a principal market the most advantageous market) annually and conducts a quarterly analysis to determine (i) if there have been recent changes to each Digital Asset Market’s trading volume and level of activity in the trailing twelve months, (ii) if any Digital Asset Markets have developed that the Trust has access to, or (iii) if recent changes to each Digital Asset Market’s price stability have occurred that would materially impact the selection of the principal market and necessitate a change in the Trust’s determination of its principal market.

The cost basis of ETH received in connection with a creation order is recorded by the Trust at the fair value of ETH at 4:00 p.m., New York time, on the creation date for financial reporting purposes.

The cost basis of Ether received in connection with a creation order is recorded by the Trust at the fair value of Ether at 4:00 p.m., New York time, on the creation date for financial reporting purposes.

The cost basis recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of the corresponding Shares to investors.

Investment Company Considerations

The Trust is an investment company for GAAP purposes and follows accounting and reporting guidance in accordance with the FASB ASC Topic 946, Financial Services—Investment Companies .

The Trust uses fair value as its method of accounting for ETH in accordance with its classification as an investment company for accounting purposes.

The Trust is not a registered investment company under the Investment Company Act of 1940.

The Trust is an investment company for U.S.

GAAP purposes and follows accounting and reporting guidance in accordance with the FASB ASC Topic 946, Financial Services—Investment Companies .

The Trust uses fair value as its method of accounting for Ether in accordance with its classification as an investment company for accounting purposes.

The Trust is not a registered investment company under the Investment Company Act.

GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes.

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Financial Highlights for the Years ended December 31, 2024, 2023 and 2022

(All amounts in the following table and the subsequent paragraphs, except Share, per Share, ETH and price of ETH amounts, are in thousands)

(All amounts in the following table and the subsequent paragraphs, except Share, per Share, Ether and price of Ether amounts, are in thousands)

For the Years Ended December 31,

Net realized and unrealized gain (loss) on investment

Net realized and unrealized gain (loss) on investment in Ether (1)

Net increase (decrease) in net assets resulting from operations

Net assets (2)

(1) Includes the impact of the Initial Distribution of 292,262.98913350 Ether, with a value of approximately $1,010.9 million to Grayscale Ethereum Mini Trust ETF, completed on July 23, 2024, as discussed in Note 4 of the notes to the financial statements.

(2) Net assets in the above table and subsequent paragraphs are calculated in accordance with U.S.

GAAP based on the Digital Asset Market price of ETH on the Digital Asset Trading Platform that the Trust considered its principal market, as of 4:00 p.m., New York time, on the valuation date.

Net realized and unrealized gain on investment in ETH for the year ended December 31, 2023 was $3,243,340, which includes a realized gain of $102,973 on the transfer of ETH to pay the Sponsor’s Fee and net change in unrealized appreciation on investment in ETH of $3,140,367.

Net realized and unrealized gain on investment in ETH for the year was driven by ETH price appreciation from $1,201.33 per ETH as of December 31, 2022, to $2,281.10 per ETH as of December 31, 2023.

Net increase in net assets resulting from operations was $3,108,856 for the year ended December 31, 2023, which consisted of the net realized and unrealized gain on investment in ETH, less the Sponsor’s Fee of $134,484.

GAAP based on the Digital Asset Market price of Ether on the Digital Asset Trading Platform that the Trust considered its principal market, as of 4:00 p.m., New York time, on the valuation date.

Net realized and unrealized gain on investment in Ether for the year ended December 31, 2024 was $2,767,727, which includes a realized gain of $157,557 on the transfer of Ether to pay the Sponsor’s Fee, a realized gain of $3,108,025 on the sale of Ether to meet redemptions, a realized gain of $888,140 on the sale of Ether related to the Initial Distribution to Grayscale Ethereum Mini Trust ETF, and net change in unrealized appreciation on investment in Ether of ($1,385,995).

Net realized and unrealized gain on investment in Ether for the year was driven by Ether price appreciation from $2,281.10 per Ether as of December 31, 2023, to $3,340.40 per Ether as of December 31, 2024.

Net increase in net assets resulting from operations was $2,585,133 for the year ended December 31, 2024, which consisted of the net realized and unrealized gain on investment in Ether, less the Sponsor’s Fee of $182,594.

Net assets decreased to $4,735,980 at December 31, 2024, a 30% decrease for the year.

The decrease in net assets resulted from the aforementioned Ether price appreciation, partially offset by the withdrawal of approximately 59,535 Ether to pay the foregoing Sponsor’s Fee, the redemption of approximately 1,197,072 Ether, with a value of $3,611,158 from the Trust, and the Initial Distribution of approximately 292,263 Ether, with a value of $1,010,935 from the Trust to Grayscale Ethereum Mini Trust ETF, partially offset by the aforementioned Ether price appreciation and the contribution of approximately 4,028 Ether, with a value of $14,886 to the Trust in connection with Share creations during the year.

Net realized and unrealized gain on investment in Ether for the year ended December 31, 2023 was $3,243,340, which includes a realized gain of $102,973 on the transfer of Ether to pay the Sponsor’s Fee and net change in unrealized appreciation on investment in Ether of $3,140,367.

Net realized and unrealized gain on investment in Ether for the year was driven by Ether price appreciation from $1,201.33 per Ether as of December 31, 2022, to $2,281.10 per Ether as of December 31, 2023.

Net assets increased to $6,758,054 at December 31, 2023, an 85% increase for the year.

The increase in net assets resulted from the aforementioned ETH price appreciation, partially offset by the withdrawal of approximately 75,001 ETH to pay the foregoing Sponsor’s Fee.

Net realized and unrealized loss on investment in ETH for the year ended December 31, 2022 was ($7,549,251), which includes a realized gain of $120,933 on the transfer of ETH to pay the Sponsor’s Fee and net change in unrealized depreciation on investment in ETH of ($7,670,184).

Net realized and unrealized loss on investment in ETH for the year was driven by ETH price depreciation from

$3,644.75 per ETH as of December 31, 2021, to $1,201.33 per ETH as of December 31, 2022.

Net decrease in net assets resulting from operations was ($7,702,493) for the year ended December 31, 2022, which consisted of the net realized and unrealized loss on investment in ETH, plus the Sponsor’s Fee of $153,242.

The increase in net assets resulted from the aforementioned Ether price appreciation, partially offset by the withdrawal of approximately 75,001 Ether to pay the foregoing Sponsor’s Fee.

Net realized and unrealized loss on investment in Ether for the year ended December 31, 2022 was ($7,549,251), which includes a realized gain of $120,933 on the transfer of Ether to pay the Sponsor’s Fee, and net change in unrealized appreciation on investment in Ether of ($7,670,184).

Net realized and unrealized loss on investment in Ether for the year was driven by Ether price depreciation from $3,644.75 per Ether as of December 31, 2021, to $1,201.33 per Ether as of December 31, 2022.

Net assets decreased to $3,649,198 at December 31, 2022, a 68% decrease for the year.

The decrease in net assets resulted from the aforementioned ETH price depreciation and the withdrawal of approximately 76,901 ETH to pay the foregoing Sponsor’s Fee.

Net realized and unrealized gain on investment in ETH for the year ended December 31, 2021 was $8,946,394, which includes a realized gain of $185,516 on the transfer of ETH to pay the Sponsor’s Fee, and net change in unrealized appreciation on investment in ETH of $8,760,878.

Net realized and unrealized gain on investment in ETH was driven by ETH price appreciation from $744.99 per ETH as of December 31, 2020, to $3,644.75 per ETH as of December 31, 2021.

Net increase in net assets resulting from operations was $8,728,949 for the year ended December 31, 2021, which consisted of the net realized and unrealized gain on investment in ETH, less the Sponsor’s Fee of $217,445.

Net assets increased to $11,351,691 at December 31, 2021, a 419% increase for the year.

The increase in net assets resulted from the aforementioned ETH price appreciation and the contribution of approximately 255,556 ETH, with a value of $434,615 to the Trust in connection with Share creations during the year, partially offset by the withdrawal of approximately 78,146 ETH to pay the foregoing Sponsor’s Fee.

The decrease in net assets resulted from the aforementioned Ether price depreciation and the withdrawal of approximately 76,901 Ether to pay the foregoing Sponsor’s Fee.

Cash Resources and Liquidity

The Trust has not had a cash balance at any time since inception.

When selling ETH, Incidental Rights and/or IR Virtual Currency in the Digital Asset Market to pay Additional Trust Expenses on behalf of the Trust, the Sponsor endeavors to sell the exact number of ETH, Incidental Rights and/or IR Virtual Currency needed to pay expenses in order to minimize the Trust’s holdings of assets other than ETH.

The Trust only receives and holds cash in order to facilitate creations and redemptions pursuant to Cash Orders, and has not otherwise had or maintained a cash balance at any time since inception.

When selling Ether in the Digital Asset Market to pay Additional Trust Expenses on behalf of the Trust, the Sponsor endeavors to sell the exact amount of Ether needed to pay expenses in order to minimize the Trust’s holdings of assets other than Ether.

In addition, upon the consummation or deemed failure of a Cash Order to create or redeem Baskets, the Trust will promptly return any excess cash it continues to hold with respect to such Cash Order to the applicable counterparty.

As a consequence, the Sponsor expects that the Trust will not record any cash flow from its operations and that its cash balance will be zero at the end of each reporting period.

Furthermore, the Trust is not a party to any off-balance sheet arrangements.

Generally, the Trust does not intend to hold cash, except in connection with Cash Orders for creations or redemptions of Baskets.

Cash includes non-interest bearing non-restricted cash with one institution.

Cash in a bank deposit account, at times, may exceed U.S.

federally insured limits.

The Trust has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk on such bank deposits.

In exchange for the Sponsor’s Fee, the Sponsor has agreed to assume most of the expenses incurred by the Trust.

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For the Years Ended December 31,

(All ETH balances are rounded to the nearest whole ETH)

(All Ether balances are rounded to the nearest whole Ether)

Opening balance

Initial Distribution (Return of Capital) (1)

Sponsor’s Fee, related party

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Closing balance

Price of ETH on principal market (1)

Price of Ether on principal market (2)

Principal Market NAV per Share (3)

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NAV per Share (4)

(1) Represents the impact of the Initial Distribution of 292,262.98913350 Ether, with a value of approximately $1,010.9 million to Grayscale Ethereum Mini Trust ETF, completed on July 23, 2024, as discussed in Note 4 of the notes to the financial statements.

(2) The Trust performed an assessment of the principal market at December 31, 2024 and identified the principal market as Crypto.com.

The Trust performed an assessment of the principal market at December 31, 2023 and 2022, and identified the principal market as Coinbase.

(2) As of December 31, 2023, 2022 and 2021, the Principal Market NAV per Share was calculated using the fair value of ETH based on the price provided by Coinbase, the Digital Asset Trading Platform that the Trust considered its principal market, as of 4:00 p.m., New York time, on the valuation date.

(3) As of December 31, 2024, the Principal Market NAV per Share was calculated using the fair value of Ether based on the price provided by Crypto.com, the Digital Asset Trading Platform that the Trust considered its principal market, as of 4:00 p.m., New York time, on the valuation date.

As of December 31, 2023 and 2022, the Principal Market NAV per Share was calculated using the fair value of Ether based on the price provided by Coinbase, the Digital Asset Trading Platform that the Trust considered its principal market, as of 4:00 p.m., New York time, on the valuation date.

Prior to February 23, 2024, Principal Market NAV was referred to as NAV and Principal Market NAV per Share was referred to as NAV per Share.

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Prior to February 23, 2024, NAV was referred to as Digital Asset Holdings and NAV per Share was referred to as Digital Asset Holdings per Share.

Business—Overview of the ETH Industry and Market—ETH Value—The Index and the Index Price” for a description of the Index and the Index Price.

Business—Overview of the Ethereum Industry and Market—Ether Value—The Index and the Index Price” for a description of the Index and the Index Price.

The Digital Asset Trading Platforms included in the Index as of December 31, 2024 were Coinbase, Kraken, LMAX Digital, and Crypto.com.

The Digital Asset Trading Platforms included in the Index as of December 31, 2023 were Coinbase, Kraken, LMAX Digital, and Crypto.com.

The Digital Asset Trading Platforms included in the Index as of December 31, 2022 were Coinbase, Kraken, and LMAX Digital.

The Digital Asset Trading Platforms included in the Index as of December 31, 2021 were Coinbase, Kraken, LMAX Digital and Bitstamp.

For accounting purposes, the Trust reflects creations and the ETH receivable with respect to such creations on the date of receipt of a notification of a creation but does not issue Shares until the requisite number of ETH is received.

At this time, the Trust is not accepting redemption requests from shareholders.

Subject to receipt of regulatory approval from the SEC and approval by the Sponsor in its sole discretion, the Trust may in the future operate a redemption program.

The Trust has not sought such relief as of the date of this Annual Report, and even if such relief is sought in the future, no assurance can be given as to the timing of such relief or that such relief will be granted.

As of December 31, 2023, the Trust had a net closing balance with a value of $6,757,639,388, based on the Index Price (non-GAAP methodology).

As of December 31, 2023, the Trust had a total market value of $6,758,054,156, based on the Digital Asset Market price of ETH on the Trust’s principal market (Coinbase).

As of December 31, 2022, the Trust had a net closing balance with a value of $3,649,440,771, based on the Index Price (non-GAAP methodology).

As of December 31, 2022, the Trust had a total market value of $3,649,197,760, based on the Digital Asset Market price of ETH on the Trust’s principal market (Coinbase).

As of December 31, 2021, the Trust had a net closing balance with a value of $11,352,407,205, based on the Index Price (non-GAAP methodology).

As of December 31, 2021, the Trust had a total market value of $11,351,690,862, based on the Digital Asset Market price of ETH on the Trust’s principal market (Coinbase).

Historical NAV and ETH Prices

As movements in the price of ETH will directly affect the price of the Shares, investors should understand recent movements in the price of ETH.

Investors, however, should also be aware that past movements in the ETH price are not indicators of future movements.

For accounting purposes, prior to July 23, 2024, the Trust reflected creations and the Ether receivable for proceeds with respect to such creations on the date of receipt of a notification of a creation but did not issue Shares until the requisite amount of Ether for proceeds was received.

Effective July 23, 2024, the date on which the Shares of the Trust began trading on NYSE Arca, the Trust reflects creations and redemptions and the Ether for proceeds receivable or payable with respect to such creations and redemptions, respectively, on the business day following the receipt of a notification of a creation or redemption order by an Authorized Participant.

Creation and redemption orders are settled on T+1 or T+2, as established at the time of order placement, and therefore the Ether for proceeds receivable or payable with respect to such creations and redemptions, respectively, are recorded as a receivable or payable until the Ether are delivered or removed from the Trust for settlement.

As of December 31, 2024, the Trust had a net closing balance of 1,417,788.29257515 Ether with a value of $4,740,715,425, based on the Index Price of $3,343.74 on December 31, 2024 (non-GAAP methodology).

As of December 31, 2024, the total market value of the Trust’s Ether was $4,735,980,013, based on the price of one Ether on the principal market (Crypto.com) of $3,340.40 on December 31, 2024.

As of December 31, 2023, the Trust had a net closing balance of 2,962,629.50149940 Ether with a value of $6,757,639,388, based on the Index Price of $2,280.96 on December 31, 2023 (non-GAAP methodology).

As of December 31, 2023, the total market value of the Trust’s Ether was $6,758,054,156, based on the price of one Ether on the principal market (Coinbase) of $2,281.10 on December 31, 2023.

As of December 31, 2022, the Trust had a net closing balance of 3,037,631.42522860 Ether with a value of $3,649,440,771, based on the Index Price of $1,201.41 on December 31, 2022 (non-GAAP methodology).

As of December 31, 2022, the total market value of the Trust’s Ether was $3,649,197,760, based on the price of one Ether on the principal market (Coinbase) of $1,201.33 on December 31, 2022.

Historical NAV and Ether Prices

As movements in the price of Ether will directly affect the price of the Shares, investors should understand recent movements in the price of Ether.

Investors, however, should also be aware that past movements in the Ether price are not indicators of future movements.

Movements may be influenced by various factors, including, but not limited to, government regulation, security breaches experienced by service providers, as well as political and economic uncertainties around the world.

The Trust’s performance prior to July 23, 2024 is based on market-determined prices on the OTCQX marketplace and on the Trust’s performance without an ongoing share creation and redemption program.

Prior to July 23, 2024, the Trust’s Shares traded at both premiums and discounts to the value of the Trust’s assets, less its expenses and other liabilities, which at times were substantial, in part due to the lack of an ongoing redemption program.

Effective as of July 23, 2024, the Trust established an ongoing share creation and redemption program and the Shares of the Trust were listed to NYSE Arca.

Hence, the Trust’s performance for periods prior to July 23, 2024 is not directly comparable to, and should not be used to make conclusions in conjunction with, the Trust’s performance for periods subsequent to July 23, 2024.

The following chart illustrates the movement in the Trust’s NAV per Share (as adjusted for the Share Split for periods prior to December 17, 2020) versus the Index Price and the Trust’s Principal Market NAV per Share (as adjusted for the Share Split for periods prior to December 17, 2020) from December 14, 2017 (the inception of the Trust’s operations) to December 31, 2024.

For more information on the determination of the Trust’s NAV, see “Item 1.

Business—Overview of the ETH Industry and Market—ETH Value—The Index and the Index Price.”

Business—Overview of the Ethereum Industry and Market—Ether Value—The Index and the Index Price.”

The following table illustrates the movements in the Index Price from January 1, 2020 to December 31, 2024.

During such period, the Index Price has ranged from $109.83 to $4,776.32, with the straight average being $1,981.09 through December 31, 2024.

The Sponsor has not observed a material difference between the Index Price and average prices from the constituent Digital Asset Trading Platforms individually or as a group.

The Sponsor has not observed a material difference between the Index Price and average prices from the Constituent Trading Platforms individually or as a group.

Twelve months ended December 31, 2020

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January 1, 2020 to December 31, 2024

The following table illustrates the movements in the Digital Asset Market price of ETH, as reported on the Trust’s principal market, from January 1, 2019 to December 31, 2023.

During such period, the price of ETH has ranged from $102.88 to $4,776.95, with the straight average being $1,408.48 through December 31, 2023:

The following table illustrates the movements in the Digital Asset Market price of Ether, as reported on the Trust’s principal market, from January 1, 2020 to December 31, 2024.

During such period, the price of Ether has ranged from $110.29 to $4,776.95, with the straight average being $1,981.11 through December 31, 2024.

Digital Asset Market Price

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Secondary Market Trading

The Trust’s Shares have been quoted on OTCQX under the symbol “ETHE” since June 20, 2019.

The price of the Shares as quoted on OTCQX has varied significantly from the NAV per Share.

From June 20, 2019 to December 31, 2023, the maximum premium of the closing price of the Shares quoted on OTCQX over the value of the Trust’s NAV per Share was 956%, the average premium was 191%, the maximum discount of the closing price of the Shares quoted on OTCQX below the value of the Trust’s NAV per Share was 60%, and the average discount was 26%.

The closing price of the Shares, as quoted on OTCQX at 4:00 p.m., New York time, on each business day between June 20, 2019 and December 31, 2023, has been quoted at a discount on 711 days.

As of December 29, 2023, the last business day of the period, the Trust’s Shares were quoted on OTCQX at a discount of 12% to the Trust’s NAV per Share.

The following table sets out the range of high and low closing prices for the Shares as reported by OTCQX, the Trust’s Principal Market NAV per Share calculated in accordance with GAAP and the Trust’s NAV per Share for each of the quarters of the prior three years.

On May 23, 2024, the SEC approved an application under Rule 19b-4 of the Securities Exchange Act of 1934, as amended by NYSE Arca to list the Shares of the Trust, which began trading on NYSE Arca under the symbol “ETHE” on July 23, 2024, following the effectiveness of the Trust’s registration statement on Form S-3, as amended (File No.

Historically, the Trust’s Shares have been quoted on OTCQX under the symbol “ETHE” from June 20, 2019 through July 22, 2024.

The price of the Shares as quoted on OTCQX has varied significantly from the Trust’s NAV per Share.

From June 20, 2019 to July 22, 2024, the maximum premium of the closing price of the Shares quoted on OTCQX over the value of the Trust’s NAV per Share was 956%, the average premium was 191%, the maximum discount of the closing price of the Shares quoted on OTCQX below the value of the Trust’s NAV per Share was 60%, and the average discount was 23%.

As of July 22, 2024, the Trust’s Shares were quoted on OTCQX at a discount of 0.1% to the Trust’s NAV per Share.

The following table sets out the range of high and low closing prices for the Shares as reported by OTCQX, the Trust’s Principal Market NAV per Share calculated in accordance with U.S.

GAAP and the Trust’s NAV per Share for each of the quarters from January 1, 2022 through July 22, 2024.

Principal Market NAV per

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Third quarter (3)

(1) The Principal Market NAV is calculated using the fair value of Ether based on the price provided by the Digital Asset Market that the Trust considers its principal market, which prior to December 31, 2024, was Coinbase.

The Trust performed an assessment of the principal market at December 31, 2024, and identified the principal market as Crypto.com.

Prior to February 23, 2024, Principal Market NAV was referred to as NAV and Principal Market NAV per Share was referred to as NAV per Share.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Principal Market and Fair Value Determination.”

(2) The Trust’s NAV per Share is derived from the Index Price as represented by the Index as of 4:00 p.m., New York time, on the valuation date.

The Index Price is calculated using non-GAAP methodology and is not used in the Trust’s financial statements, unless otherwise disclosed.

Prior to February 23, 2024, NAV was referred to as Digital Asset Holdings and NAV per Share was referred to as Digital Asset Holdings per Share.

Business—Valuation of Ether and Determination of NAV.”

(3) As of July 23, 2024, Shares of the Trust began trading on NYSE Arca under the symbol “ETHE.” Therefore, this represents the period from June 30, 2024 through July 22, 2024.

As of July 23, 2024, Shares of the Trust began trading on NYSE Arca under the symbol “ETHE,” following the effectiveness of the Trust’s registration statement on Form S-3, as amended (File No.

From July 23, 2024 to December 31, 2024, the maximum premium of the closing price of the Shares listed on NYSE Arca over the value of the Trust’s NAV per Share was 1.6%, the average premium was 0.1%, the maximum discount of the closing price of the Shares listed on NYSE Arca below the value of the Trust’s NAV per Share was 0.2%, and the average discount was 0.1%.

As of December 31, 2024, the last business day of the period, the Trust’s Shares were listed on NYSE Arca at a discount of 0.1% to the Trust’s NAV per Share.

The following table sets out the range of high and low closing prices for the Shares as reported by NYSE Arca, the Trust’s Principal Market NAV per Share calculated in accordance with U.S.

GAAP and the Trust’s NAV per Share for each of the quarters from July 23, 2024 through December 31, 2024.

NYSE Arca (3)

Principal Market NAV per

NAV per Share (2)

Principal Market NAV per

NAV per Share (2)

Third quarter (3)

Fourth quarter

(1) The Principal Market NAV is calculated using the fair value of ETH based on the price provided by the Digital Asset Market that the Trust considers its principal market, which is Coinbase.

The Trust performed an assessment of the principal market at December 31, 2024, and identified the principal market as Crypto.com.

Prior to February 23, 2024, Principal Market NAV was referred to as NAV and Principal Market NAV per Share was referred to as NAV per Share.

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(2) The Trust’s NAV per Share is derived from the Index Price as represented by the Index as of 4:00 p.m., New York time, on the valuation date.

The Index Price is calculated using non-GAAP methodology and is not used in the Trust’s financial statements.

The Index Price is calculated using non-GAAP methodology and is not used in the Trust’s financial statements, unless otherwise disclosed.

Prior to February 23, 2024, NAV was referred to as Digital Asset Holdings and NAV per Share was referred to as Digital Asset Holdings per Share.

Business—Valuation of ETH and Determination of NAV.”

The following chart sets out the historical closing prices for the Shares as reported by OTCQX and the Trust’s NAV per Share from June 20, 2019 to December 31, 2023.

Business—Valuation of Ether and Determination of NAV.”

(3) As of July 23, 2024, Shares of the Trust began trading on NYSE Arca under the symbol “ETHE.” Therefore, this represents the period from July 23, 2024 through September 30, 2024.

Effective as of July 23, 2024, the Trust established an ongoing share creation and redemption program and the Shares of the Trust were listed to NYSE Arca.

Hence, the Trust’s performance for periods prior to July 23, 2024 are not directly comparable to, and should not be used to make conclusions in conjunction with, the Trust’s performance for periods subsequent to July 23, 2024.

The following chart sets out the historical closing prices for the Shares as reported by OTCQX and the Trust’s NAV per Share from June 20, 2019 to July 22, 2024.

ETHE Premium/(Discount):

ETHE Share Price vs.

NAV per Share ($)

The following chart sets out the historical premium and discount for the Shares as reported by OTCQX and the Trust’s NAV per Share from June 20, 2019 to December 31, 2023.

NAV per Share (Non-GAAP) ($)

The following chart sets out the historical closing prices for the Shares as reported by NYSE Arca from July 23, 2024 to December 31, 2024 and the Trust’s NAV per Share from July 23, 2024 to December 31, 2024.

ETHE Premium/(Discount):

ETHE Share Price vs.

NAV per Share (%)

NAV per Share (Non-GAAP) ($)

The following chart sets out the historical premium and discount for the Shares calculated as a percentage of the historical closing prices for the Shares as reported by OTCQX and the Trust’s NAV per Share from June 20, 2019 to July 22, 2024.

ETHE Premium/(Discount):

ETHE Share Price vs.

NAV per Share (Non-GAAP) (%)

The following chart sets out the historical premium and discount for the Shares calculated as a percentage of the historical closing prices for the Shares as reported by NYSE Arca from July 23, 2024 to December 31, 2024 divided by the Trust’s NAV per Share from July 23, 2024 to December 31, 2024.

ETHE Premium/(Discount):

ETHE Share Price vs.

NAV per Share (Non-GAAP) (%)

Recent Developments

On January 1, 2025, Grayscale Investments, LLC (“GSI”) consummated an internal corporate reorganization (the “Reorganization”), pursuant to which Grayscale Investments, LLC, the Sponsor of the Trust prior to the Reorganization, merged with and into Grayscale Operating, LLC (“GSO”), a Delaware limited liability company and a wholly owned indirect subsidiary of DCG, with GSO continuing as the surviving company (the “Merger”).

As a result of the Merger, GSO succeeded by operation of law to all the rights, powers, privileges and franchises and became subject to all of the obligations, liabilities, restrictions and disabilities of GSI, including with respect to the Sponsor Contracts (as defined below), all as provided under the Delaware Limited Liability Company Act.

The Reorganization is not expected to have any material impact on the operations of the Trust.

In connection with the Reorganization, on January 1, 2025, and promptly following the effectiveness of the Merger, GSO assigned certain contracts pertaining to its role as Sponsor (as such term is defined in the Trust Agreement) of the Trust (such contracts, the “Sponsor Contracts”) to Grayscale Investments Sponsors, LLC, a Delaware limited liability company and a wholly owned direct subsidiary of GSO (“GSIS”), whereby GSIS assumed all of the rights and obligations of GSO under the Sponsor Contracts.

Other than the assumption of the Sponsor Contracts by GSIS, the Reorganization does not alter the rights or obligations under any of the Sponsor Contracts.

In connection with the Reorganization, on January 1, 2025, and promptly following the effectiveness of the Merger, GSO and GSIS executed a Certificate of Admission, pursuant to which GSIS was admitted as an additional Sponsor of the Trust under the Trust Agreement, by and among GSO (as successor in interest to GSI), the Trustee, and the shareholders from time to time thereunder, as amended from time to time.

GSIS shall be subject to the rights and obligations of a Sponsor under the Trust Agreement.

On January 3, 2025, GSO voluntarily withdrew as a Sponsor of the Trust pursuant to the terms of the Trust Agreement, and, effective May 3, 2025, GSIS shall be the sole remaining Sponsor of the Trust.

Quantitative and Qualitat ive Disclosures about Market Risk

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Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

The Trust maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Principal Executive Officer and Principal Financial and Accounting Officer of the Sponsor, and to the audit committee of the board of directors of the Sponsor, as appropriate, to allow timely decisions regarding required disclosure.

The Trust maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Principal Executive Officer and Principal Financial and Accounting Officer of the Sponsor, and to the audit committee of the Sponsor, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of the Principal Executive Officer and the Principal Financial and Accounting Officer of the Sponsor, the Sponsor conducted an evaluation of the Trust’s disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e).

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Based on their assessment and those criteria, the Principal Executive Officer and Principal Financial and Accounting Officer of the Sponsor concluded that the Trust maintained effective internal control over financial reporting as of December 31, 2024.

Marcum LLP, the independent registered public accounting firm that audited the financial statements as of and for the year ended December 31, 2023 included in this Annual Report on Form 10-K, as stated in their report which is included herein, issued an attestation report on the effectiveness of the Trust’s internal control over financial reporting as of December 31, 2023 on page F- 2 .

KPMG LLP, the independent registered public accounting firm that audited the financial statements as of and for the year ended December 31, 2024 included in this Annual Report on Form 10-K, as stated in their report which is included herein, issued an attestation report on the effectiveness of the Trust’s internal control over financial reporting as of December 31, 2024 on page F- 2 .

Changes in Internal Control Over Financial Reporting

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Under the Trust Agreement, all management functions of the Trust have been delegated to and are conducted by the Sponsor, its agents and its affiliates, including without limitation, the Custodian and its agents.

As officers of the Sponsor, Michael Sonnenshein, the principal executive officer of the Sponsor, and Edward McGee, the principal financial officer of the Sponsor, may take certain actions and execute certain agreements and certifications for the Trust, in their capacity as the principal officers of the Sponsor.

The Sponsor has a board of directors (the “Board”) that is responsible for managing and directing the affairs of the Sponsor.

As officers of the Sponsor, Peter Mintzberg, the principal executive officer of the Sponsor, and Edward McGee, the principal financial and accounting officer of the Sponsor, may take certain actions and execute certain agreements and certifications for the Trust, in their capacity as the principal officers of the Sponsor.

As of and prior to December 31, 2024, GSI had a board of directors that was responsible for managing and directing the affairs of the Sponsor.

From and after January 1, 2025, GSO Intermediate Holdings Corporation (“GSOIH”), a Delaware corporation formed in connection with the Reorganization, which is the sole managing member of GSO and an indirect subsidiary of DCG, has a board of directors (each such board of directors, the “Board”).

The Board consists of Mark Shifke, Matthew Kummell, Mr.

Sonnenshein, and Mr.

McGee, who also retain the authority granted to them as officers under the limited liability company agreement of the Sponsor.

Mintzberg, and Mr.

Mintzberg and Mr.

McGee also retain the authority granted to them as officers under the limited liability company agreement of the Sponsor.

The Sponsor has an Audit Committee.

The Audit Committee has the responsibility for overseeing the financial reporting process of the Trust, including the risks and controls of that process and such other oversight functions as are typically performed by an audit committee of a public company.

The Audit Committee consists of Messrs.

Sonnenshein and McGee, and Hugh Ross, Chief Operating Officer of the Sponsor.

The Audit Committee consists of Mr.

McGee and Hugh Ross, Chief Operating Officer of the Sponsor.

The Sponsor has a code of ethics (the “Code of Ethics”) that applies to its executive officers and agents.

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The Sponsor’s Code of Ethics is intended to be a codification of the business and ethical principles that guide the Sponsor, and to deter wrongdoing, to promote honest and ethical conduct, to avoid conflicts of interest, and to foster compliance with applicable governmental laws, rules and regulations, the prompt internal reporting of violations and accountability for adherence to this code.

During the year ended December 31, 2024, references to the “Sponsor” in this section refer to GSI, and thereafter refer to GSO or GSIS, as applicable.

In connection with the Reorganization, the former Board of GSI was reconstituted at GSOIH.

The members of the Board of GSOIH are the same as the members of the Board of GSI prior to the Reorganization.

Additionally, the former Audit Committee of GSI was reconstituted at GSIS.

The members of the Audit Committee of GSIS are the same as the members of the Audit Committee of GSI prior to the Reorganization.

From and after January 1, 2025, any references to the Board in this section refer to the Board of GSOIH and any references to the Audit Committee in this section refer to the Audit Committee of GSIS.

Mark Shifke, Chairman of the Board

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Matthew Kummell, Board Member

Matt Kummell, 48, is Senior Vice President of Operations at DCG and has served as a director of the Sponsor since January 2024.

Matt Kummell, 49, is Senior Vice President of Strategy & Operations at DCG and has served as a director of the Sponsor since January 2024.

In his role at DCG, Mr.

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He is a graduate of the University of California, Los Angeles (B.A.) and the Tuck School of Business at Dartmouth College (MBA).

Michael Sonnenshein, Board Member and Chief Executive Officer

Michael Sonnenshein, 37, has been CEO of the Sponsor since January 2021 and has served as a director of the Sponsor since February 2020.

Before serving as CEO, Mr.

Sonnenshein served as Managing Director of the Sponsor since 2018.

In this role, Mr.

Sonnenshein oversees the strategic direction and growth of the business.

Sonnenshein is also responsible for maintaining many of the firm’s key relationships with clients, industry stakeholders, and regulators.

From 2015 to 2017, Mr.

Sonnenshein was Director of Sales & Business Development for the Sponsor, and prior to that served as an Account Executive from 2014 to 2015.

Under his leadership, the firm has expanded its capabilities as a full services asset manager, establishing Grayscale Securities, LLC and Grayscale Advisors, LLC, and has grown to be a leader in crypto investing, offering a wide range of investments, including single-asset and diversified products and ETFs.

Prior to joining the Sponsor, Mr.

Sonnenshein was a financial adviser at JP Morgan Securities, covering HNW individuals and institutions, and an analyst at Barclays Wealth, providing coverage to middle-market hedge funds and institutions.

Sonnenshein earned his Bachelor of Business Administration from the Goizueta Business School at Emory University and his Master of Business Administration from the Leonard N.

Stern School of Business at New York University.

Sonnenshein was honored in 2021 as one of 100 People Transforming Business by Business Insider and in 2018 as the publication’s Rising Stars of Wall Street.

Peter Mintzberg, Board Member and Chief Executive Officer

Peter Mintzberg, 56, has been the Chief Executive Officer of the Sponsor and has served as a director of the Sponsor since August 2024.

Mintzberg joins the Sponsor from Goldman Sachs, where he served as Global Head of Strategy for Asset and Wealth Management.

Prior, he held several global leadership roles in Strategy, M&A, and Investor Relations at BlackRock, Apollo, OppenheimerFunds, and Invesco.

With deep knowledge across a broad base of client types and asset classes, Mintzberg has over two decades of experience developing and executing strategy and innovating to drive growth.

Mintzberg started his career working at McKinsey & Co.

in New York, San Francisco, and São Paulo, focused on the financial services and technology sectors.

Mintzberg was recognized as a Latino leader in Finance by The Alumni Society in 2018, and was selected as a David Rockefeller Fellow in the 2016-2017 Class by the Partnership for New York City.

He earned a bachelor’s degree in engineering from the Universidade Federal Rio de Janeiro, and an MBA from Harvard University.

Edward McGee, Board Member and Chief Financial Officer

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Digital Currency Group, Inc.

Genesis Global Capital, LLC (2)

Directors & Executive Officers of the Sponsor:

Matthew Kummell

Michael Sonnenshein

Peter Mintzberg

Directors & executive officers of the Sponsor as a group

(1) On March 2, 2022, the Board approved the purchase by DCG, the parent company of the Sponsor, of up to an aggregate total of $200 million worth of Shares of the Trust and shares of any of the following five investment products the Sponsor also acts as the sponsor and manager of, including Grayscale Bitcoin Trust (BTC) (NYSE Arca:

(1) On March 2, 2022, the Board approved the purchase by DCG, the indirect parent company of the Sponsor, of up to an aggregate total of $200 million worth of Shares of the Trust and shares of any of the following five investment products the Sponsor also acts as the sponsor and manager of, including Grayscale Bitcoin Trust ETF (NYSE Arca:

GBTC), Grayscale Bitcoin Cash Trust (BCH) (OTCQX:

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The Share purchase authorization does not obligate DCG to acquire any specific number of Shares in any period, and may be expanded, extended, modified, or discontinued at any time.

From March 2, 2022 through February 19, 2024, DCG had not purchased any Shares of the Trust under this authorization.

(2) Genesis Global Capital, LLC is a wholly owned subsidiary of Genesis Global Holdco, LLC, which is a wholly owned subsidiary of, but not controlled by, Digital Currency Group, Inc.

Genesis Global Capital, LLC, together with its parent company, Genesis Global Holdco, LLC, and certain other affiliates, filed a voluntary petition for reorganization under the Bankruptcy Code in January 2023.

From March 2, 2022 through February 24, 2025, DCG did not purchase any Shares of the Trust under this authorization.

(2) The Trust does not have any directors, officers or employees.

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* Represents beneficial ownership of less than 1%.

Unless otherwise indicated, the address for each shareholder listed in the table above is c/o Grayscale Investments, LLC, 290 Harbor Drive, 4 th Floor, Stamford, Connecticut 06902.

Unless otherwise indicated, the address for each shareholder listed in the table above is c/o Grayscale Investments Sponsors, LLC, 290 Harbor Drive, 4 th Floor, Stamford, Connecticut 06902.

Certain Relationships and Relate d Transactions and Director Independence

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Digital Currency Group, Inc.

is (i) the sole member and parent company of the Sponsor, and parent company of Genesis, one of the Liquidity Providers from October 3, 2022 through September 12, 2023, (ii) the indirect parent company of Grayscale Securities, the only acting Authorized Participant as of the date of this Annual Report, (iii) formerly the indirect parent company of the Index Provider (prior to its sale to an unaffiliated third party on November 20, 2023), (iv) a minority interest holder in Coinbase, Inc., which operates Coinbase, one of the Digital Asset Trading Platforms included in the Index, and which is also the parent company of the Custodian, representing less than 1.0% of its equity, and (v) a minority interest holder in Kraken, one of the Digital Asset Trading Platforms included in the Index, representing less than 1.0% of its equity.

Digital Currency Group, Inc.

has investments in a large number of digital assets and companies involved in the digital asset ecosystem, including trading platforms and custodians.

Digital Currency Group, Inc.’s positions on changes that should be adopted in the Ethereum Network could be adverse to positions that would benefit the Trust or its shareholders.

Additionally, before or after a hard

fork, Digital Currency Group, Inc.’s position regarding which fork among a group of incompatible forks of the Ethereum Network should be considered the “true” Ethereum Network could be adverse to positions that would most benefit the Trust.

DCG is (i) the sole equity holder and indirect parent company of the Sponsor, (ii) the indirect parent company of Grayscale Securities, the Authorized Participant from October 3, 2022 through July 22, 2024, and (iii) a minority interest holder in Kraken, one of the Digital Asset Trading Platforms included in the Index, representing less than 1.0% of its equity.

DCG has investments in a large number of digital assets and companies involved in the digital asset ecosystem, including trading platforms and custodians.

DCG’s positions on changes that should be adopted in the Ethereum Network could be adverse to positions that would benefit the Trust or its shareholders.

Additionally, before or after a hard fork, DCG’s position regarding which fork among a group of incompatible forks of the Ethereum Network should be considered the “true” Ethereum Network could be adverse to positions that would most benefit the Trust.

The Sponsor has a conflict of interest in allocating its own limited resources among, when applicable, different clients and potential future business ventures, to each of which it owes fiduciary duties.

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The Sponsor will, however, not retain any affiliated service providers for the Trust which the Sponsor has reason to believe would knowingly or deliberately favor any other client over the Trust.

The Authorized Participant

Authorized Participants

Prior to October 3, 2022, Genesis, an affiliate of the Trust and the Sponsor, was the only Authorized Participant and was party to a participant agreement with the Sponsor and the Trust.

Since October 3, 2022, the only Authorized Participant is Grayscale Securities, an affiliate of the Trust and the Sponsor.

As a result of this affiliation, the Sponsor has an incentive to resolve questions between Grayscale Securities, on the one hand, and the Trust and shareholders, on the other hand, in favor of Grayscale Securities (including, but not limited to, questions as to the calculation of the Basket Amount).

Lastly, several employees of the Sponsor and Digital Currency Group, Inc.

are FINRA-registered representatives who maintain their licenses through Grayscale Securities.

Prior to September 12, 2023, Genesis, an affiliate of the Trust and the Sponsor, had been engaged to act as one of the Liquidity Providers.

In its capacity as a Liquidity Provider, Genesis engaged in ETH trading with the Trust’s affiliated entities.

For example, when the Sponsor received the Sponsor’s Fee in ETH, it sold the ETH through Genesis.

For this service, Genesis charged the Sponsor a transaction fee, which was not borne by the Trust.

Additionally, the Sponsor’s parent company, Digital Currency Group, Inc., is the sole shareholder and parent company of Genesis, in addition to a customer of Genesis, and may buy or sell ETH through Genesis from time to time, independent of the Trust.

As of September 12, 2023, Genesis no longer serves as a Liquidity Provider.

From October 3, 2022 through July 22, 2024, Grayscale Securities, an affiliate of the Trust and the Sponsor, was the Authorized Participant.

Effective July 23, 2024, the Sponsor, on behalf of the Trust, and the Transfer Agent entered into Participant Agreements with Jane Street Capital, LLC, Virtu Americas LLC, Macquarie Capital (USA) Inc., ABN AMRO Clearing USA LLC and Goldman Sachs & Co.

LLC, pursuant to which such entities have agreed to act as Authorized Participants.

The Sponsor may engage additional Authorized Participants who are unaffiliated with the Trust in the future.

Proprietary Trading/Other Clients

Because the officers of the Sponsor may trade ETH for their own personal trading accounts (subject to certain internal trading policies and procedures) at the same time as they are managing the account of the Trust, the activities of the officers of the Sponsor, subject to their fiduciary duties, may, from time-to-time, result in their taking positions in their personal trading accounts which are opposite of the positions taken for the Trust.

Because the officers of the Sponsor may trade Ether for their own personal trading accounts (subject to certain internal trading policies and procedures) at the same time as they are managing the account of the Trust, the activities of the officers of the Sponsor, subject to their fiduciary duties, may, from time-to-time, result in their taking positions in their personal trading accounts which are opposite of the positions taken for the Trust.

Records of the Sponsor’s officers’ personal trading accounts will not be available for inspection by shareholders.

The Index Provider

Digital Currency Group, Inc.

was the indirect parent company of the Index Provider until the Index Provider was sold by Digital Currency Group, Inc.

to an unaffiliated third party in November 2023.

Prior to its sale by Digital Currency Group, Inc., the Index Provider was an affiliate of the Sponsor and the Trust and had an incentive to resolve questions regarding, or changes to, the manner in which the Index was constructed and in which the Index Price was calculated in a way that favored the Sponsor and the Trust.

Principal Accou ntant Fees and Services

Fees for services performed by Marcum LLP and Friedman LLP, prior to the acquisition of certain assets of Friedman LLP by Marcum LLP effective September 1, 2022, for the years ended December 31, 2023 and 2022 were:

Fees for services performed by KPMG LLP (“KPMG”), for the year ended December 31, 2024, and Marcum LLP (“Marcum”), for the year ended December 31, 2023.

Years Ended December 31,

(1) The Sponsor was notified that certain assets of Friedman LLP (“Friedman”), the Trust’s independent registered public accounting firm, were acquired by Marcum LLP (“Marcum”) effective September 1, 2022.

On September 27, 2022, the Audit Committee of the Board of Directors of the Sponsor approved the dismissal of Friedman and the engagement of Marcum to serve as the independent registered public accounting firm of the Trust.

As of September 1, 2022, the services previously provided by Friedman are provided by Marcum.

In the table above, in accordance with the SEC’s definitions and rules, Audit Fees are fees paid to Marcum for professional services for the audit of the Trust’s financial statements included in the annual report on Form 10-K and review of financial statements included in the quarterly reports on Form 10-Q, and for services that are normally provided by the accountants in connection with regulatory filings or engagements.

In the table above, in accordance with the SEC’s definitions and rules, Audit Fees are fees paid to KPMG, and previously Marcum, for professional services for the audit of the Trust’s financial statements included in the annual report on Form 10-K and review of financial statements included in the quarterly reports on Form 10-Q, and for services that are normally provided by the accountants in connection with regulatory filings or engagements.

Pre-Approved Policies and Procedures

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Such determinations, including for the fiscal year ended December 31, 2024, are made by the Sponsor’s Board of Directors and Audit Committee.

From and after January 1, 2025, such determinations are made by the Board of Directors of GSOIH and the Audit Committee of GSIS.

Exhibits and Fina ncial Statements Schedules

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Exhibit Description

Amended and Restated Declaration of Trust and Trust Agreement (incorporated by reference to Exhibit 4.1 of the Registration Statement on Form 10 filed by the Registrant on August 6, 2020).

Amendment No.

1 to the Amended and Restated Declaration of Trust and Trust Agreement (incorporated by reference to Exhibit 4.2 of the Registration Statement on Form 10 filed by the Registrant on August 6, 2020).

Certificate of Amendment to Certificate of Trust (attached as Exhibit A to Amendment No.

1 to the Amended and Restated Declaration of Trust and Trust Agreement).

Second Amended and Restated Declaration of Trust and Trust Agreement (incorporated by reference to Exhibit 4.1 of the Form 8-K filed by the Registrant on June 12, 2024).

Amendment No.

2 to the Amended and Restated Declaration of Trust and Trust Agreement (incorporated by reference to Exhibit 4.4 of the Registration Statement on Form 10 filed by the Registrant on August 6, 2020).

Participant Agreement, dated October 3, 2022, between the Sponsor and Grayscale Securities, LLC (incorporated by reference to Exhibit 4.1 on Form 8-K filed by the Registrant on October 3, 2022)

Description of Registrant’s Securities (incorporated by reference to Exhibit 4.6 of the Annual Report on Form 10-K filed by the Registrant on March 5, 2021).

Amended and Restated Custodian Agreement, dated June 29, 2022, between the Sponsor and the Custodian (incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q filed by the Registrant on August 5, 2022).

Distribution and Marketing Agreement, dated October 3, 2022, between the Sponsor and Grayscale Securities, LLC (incorporated by reference to Exhibit 10.1 on Form 8-K filed by the Registrant on October 3, 2022).

1 to the Second Amended and Restated Declaration of Trust and Trust Agreement (incorporated by reference to Exhibit 4.1 on Form 8-K filed by the Registrant on November 4, 2024).

Form of Participant Agreement (incorporated by reference to Exhibit 4.6 to Amendment No.

1 to the Registration Statement filed by the Registrant on May 30, 2024).

Description of Registrant’s Securities.

Prime Broker Agreement, dated as of May 22, 2024, by and among the Trust, the Sponsor and the Prime Broker, on behalf of itself, the Custodian and Coinbase Credit (incorporated by reference to Exhibit 99.1 of Amendment No.

1 to the Registration Statement on Form S-3 filed by the Trust with the SEC on May 30, 2024).

Fund Administration and Accounting Agreement, dated February 26, 2024, between the Trust and the Administrator (incorporated by reference to Exhibit 10.1 on Form 8-K filed by the Registrant on February 27, 2024).

Marketing Agent Agreement, dated May 14, 2024, between the Sponsor and the Marketing Agent.

Index License Agreement (incorporated by reference to Exhibit 10.1 on Form 8-K filed by the Registrant on February 4, 2022).

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1 to the Index License Agreement dated June 20, 2023, between the Sponsor and Index Provider (incorporated by reference to Exhibit 10.1 on Form 8-K filed by the Registrant on June 23, 2023).

Transfer Agency and Service Agreement (incorporated by reference to Exhibit 10.4 of the Registration Statement on Form 10 filed by the Registrant on August 6, 2020).

Amendment No.

6 to the Index License Agreement dated March 1, 2025, between the Sponsor and Index Provider.

Transfer Agency and Service Agreement, dated May 8, 2024, between the Trust and the Transfer Agent (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed by the Registrant on May 15, 2024).

Co-Transfer Agency Agreement, dated May 22, 2024, between the Sponsor and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 99.7 to Amendment No.‌ 1 to the Registration Statement filed by the Registrant on May 30, 2024).

Assignment and Assumption Agreement (incorporated by reference to Exhibit 10.1 on Form 8-K filed by the Registrant on January 3, 2025).

Coinbase Assignment Agreement (incorporated by reference to Exhibit 10.2 on Form 8-K filed by the Registrant on January 3, 2025).

Foreside Assignment Agreement (incorporated by reference to Exhibit 10.3 on Form 8-K filed by the Registrant on January 3, 2025).

Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification by Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification by Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification by Principal Executive Officer Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Certification by Principal Financial Officer Pursuant to 18 U.S.C.

Certification by Principal Financial and Accounting Officer Pursuant to 18 U.S.C.

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Recovery of Erroneously Awarded Compensation Policy.

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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dollars (or other applicable fiat currency) at such time to enable the Trust to timely pay any Additional Trust Expenses, through use of the Sponsor’s commercially reasonable efforts to obtain the highest such price.

“ Additional Trust Expenses ”—Together, any expenses incurred by the Trust in addition to the Sponsor’s Fee that are not Sponsor-paid Expenses, including, but not limited to, (i) taxes and governmental charges, (ii) expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Trust to protect the Trust or the interests of shareholders (including in connection with any Incidental Rights and any IR Virtual Currency), (iii) any indemnification of the Custodian or other agents, service providers or counterparties of the Trust, (iv) the fees and expenses related to the listing, quotation or trading of the Shares on any Secondary Market (including legal, marketing and audit fees and expenses) to the extent exceeding $600,000 in any given fiscal year and (v) extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters.

“ Actual Execution Cash Order ”—A Cash Order pursuant to which any price differential between (x) the Total Basket NAV on the trade date and (y) the price realized in acquiring or disposing of the corresponding Total Basket Amount, as the case may be, will be borne solely by the Authorized Participant.

“ Additional Creation Cash ”—In connection with a creation pursuant to an Actual Execution Cash Order, the amount of additional cash required to be delivered by the Authorized Participant in the event the price realized in acquiring the corresponding Total Basket Amount is higher than the Total Basket NAV on the trade date.

“ Additional Redemption Cash ”—In connection with a redemption pursuant to an Actual Execution Cash Order, the amount of additional cash to be delivered to the Authorized Participant in the event the price realized in disposing the corresponding Total Basket Amount is higher than the Total Basket NAV on the trade date.

“ Additional Trust Expenses ”—Together, any expenses incurred by the Trust in addition to the Sponsor’s Fee that are not Sponsor-paid Expenses, including, but not limited to, (i) taxes and governmental charges, (ii) expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Trust to protect the Trust or the interests of shareholders, (iii) any indemnification of the Custodian or other agents, service providers or counterparties of the Trust, (iv) the fees and expenses related to the listing, quotation or trading of the Shares on any Secondary Market (including legal, marketing and audit fees and expenses) to the extent exceeding $600,000 in any given fiscal year and (v) extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters.

“ Administrator ”—The Bank of New York Mellon, a New York corporation authorized to conduct banking business.

“ Administrator Fee ”—The fee payable to any administrator of the Trust for services it provides to the Trust, which the Sponsor will pay such administrator as a Sponsor-paid Expense.

“ Affirmative Action ”—A decision by the Trust to acquire or abandon specific Incidental Rights and IR Virtual Currency at any time prior to the time of a creation of Shares.

“ Agent ”—A Person appointed by the Trust to act on behalf of the shareholders in connection with any distribution of Incidental Rights and/or IR Virtual Currency.

“ Authorized Participant ”—Certain eligible financial institutions that have entered into an agreement with the Trust and the Sponsor concerning the creation of Shares.

Each Authorized Participant (i) is a registered broker-dealer, (ii) has entered into a Participant Agreement with the Sponsor and (iii) owns a digital wallet address that is known to the Custodian as belonging to the Authorized Participant or a Liquidity Provider.

“ Affirmative Action ”—A decision by the Trust to acquire or abandon specific Incidental Rights and IR Virtual Currency at any time prior to the time of a creation or redemption of Shares.

“ AML ”—Anti-money laundering.

“ AP Designee ”—An Authorized Participant’s designee in connection with In-Kind Orders (to the extent In-Kind Regulatory Approval is obtained).

“ Authorized Participant ”—Certain eligible financial institutions that have entered into an agreement with the Trust and the Sponsor concerning the creation or redemption of Shares.

Each Authorized Participant (i) is a registered broker-dealer and (ii) has entered into a Participant Agreement with the Sponsor and the Transfer Agent.

Subject to In-Kind Regulatory Approval, in the future any Authorized Participants creating and redeeming Shares through In-Kind Orders must also own, or their AP Designee (as defined above) must own, an Ether wallet address that is known to the Custodian as belonging to the Authorized Participant or its AP Designee and maintain an account with the Custodian.

“ Basket ”—A block of 10,000 Shares.

“ Basket Amount ”—On any trade date, the number of ETH required as of such trade date for each Creation Basket, as determined by dividing (x) the number of ETH owned by the Trust at 4:00 p.m., New York time, on such trade date, after deducting the number of ETH representing the U.S.

dollar value of accrued but unpaid fees and expenses of the Trust (converted using the Index Price at such time, and carried to the eighth decimal place), by (y) the number of Shares outstanding at such time (with the quotient so obtained calculated to one one-hundred-millionth of one ETH ( i.e.

“ Basket Amount ”—On any trade date, the amount of Ether required as of such trade date for the creation or redemption of a Basket, as determined by dividing (x) the amount of Ether owned by the Trust at 4:00 p.m., New York time, on such trade date, after deducting the amount of Ether representing the U.S.

, carried to the eighth decimal place)), and multiplying such quotient by 10,000.

“ Blockchain ” or “ Ethereum Blockchain ”—The public transaction ledger of the Ethereum Network on which transactions in ETH are recorded.

“ Basket NAV ”—The U.S.

dollar value of a Basket calculated by multiplying the Basket Amount by the Index Price as of the trade date.

“ Binance ”—Binance Holdings Ltd.

“ Blockchain ”—The public transaction ledger of the Ethereum Network on which transactions in Ether are recorded.

“ Cash Account ”—The segregated account maintained by the Transfer Agent in the name of the Trust for purposes of receiving cash from Authorized Participants in connection with creations of Shares and distributing cash to Authorized Participants in connection with redemptions of Shares.

“ Cash Order ”—An order for the creation or redemption of Shares pursuant to procedures facilitated by the Transfer Agent and pursuant to which a Liquidity Provider is engaged to facilitate the purchase or sale of Ether.

A Cash Order may be executed as either a Variable Fee Cash Order or an Actual Execution Cash Order.

Unless the Sponsor determines otherwise in its sole discretion based on market conditions and other factors existing at the time of such Cash Order, all creations and redemptions pursuant to Cash Orders are expected to be executed as Variable Fee Cash Orders.

“ CEA ”—Commodity Exchange Act of 1936, as amended.

“ CFPB ”—The Consumer Financial Protection Bureau.

“ CFTC ”—The U.S.

Commodity Futures Trading Commission, an independent agency with the mandate to regulate commodity futures and option markets in the United States.

“ CME ”—The Chicago Mercantile Exchange.

“ Code ”—The U.S.

Internal Revenue Code of 1986, as amended.

“ Coinbase ”—Coinbase, Inc.

“ Coinbase Credit ”—Coinbase Credit, Inc.

“ Co-Transfer Agent ”—Continental Stock Transfer & Trust Company.

“ Covered Person ”—The Sponsor and its affiliates.

Business—Description of the Trust Agreement—The Sponsor—Liability of the Sponsor and Indemnification.”

“ Creation Basket ”—Basket of Shares issued by the Trust in exchange for deposits of the Basket Amount required for each such Creation Basket.

“ Creation Basket ”—Basket of Shares issued by the Trust upon deposit of the Basket Amount required for each such Creation Basket.

“ Creation Time ”—With respect to the creation of any Shares by the Trust, the time at which the Trust creates such Shares.

“ Custodial Services ”—The Custodian’s services that (i) allow ETH to be deposited from a public blockchain address to the Trust’s Digital Asset Account and (ii) allow the Trust and the Sponsor to withdraw ETH from the Trust’s Digital Asset Account to a public blockchain address the Trust or the Sponsor controls pursuant to instructions the Trust or the Sponsor provides to the Custodian.

“ Custodial and Prime Broker Services ”—The services of the Custodian and the Prime Broker that provide for:

(i) holding of the Trust’s Ether in the Vault Balance and the Settlement Balance;

(ii) transfer of the Trust’s Ether between the relevant Vault Balance and the Settlement Balance;

(iii) the deposit of Ether from a public blockchain address into the respective account or accounts in which the Vault Balance or the Settlement Balance are maintained;

and (iv) the withdrawal of Ether from the Vault Balance to a public blockchain address the Trust controls.

“ Custodial Entities ”—The Prime Broker, together with the Custodian.

“ Custodian ”—Coinbase Custody Trust Company, LLC.

“ Custodian Agreement ”—The Amended and Restated Custodial Services Agreement, dated as of June 29, 2022, by and between the Trust and the Sponsor and Custodian that governs the Trust’s and the Sponsor’s use of the Custodial Services provided by the Custodian as a fiduciary with respect to the Trust’s assets.

“ Custodian Fee ”—Fee payable to the Custodian for services it provides to the Trust, which the Sponsor shall pay to the Custodian as a Sponsor-paid Expense.

“ Custodian Fee ”—Fee payable to the Custodian and the Prime Broker for services they provide to the Trust, which the Sponsor shall pay to the Custodian and the Prime Broker as a Sponsor-paid Expense.

“ DAOs ”—Decentralized autonomous organizations.

“ DCG ”—Digital Currency Group, Inc.

“ Digital Asset Account ”—A segregated custody account controlled and secured by the Custodian to store private keys, which allow for the transfer of ownership or control of the Trust’s ETH on the Trust’s behalf.

“ DCM ”—A designated contract market, which is a board of trade (commonly referred to as an exchange) that operates under the regulatory oversight of the CFTC.

“ Digital Asset Market ”—A “Brokered Market,” “Dealer Market,” “Principal-to-Principal Market” or “Exchange Market” (referred to as “Trading Platform Market” in this Annual Report), as each such term is defined in the Financial Accounting Standards Board Accounting Standards Codification Master Glossary.

“ Digital Asset Trading Platform ”—An electronic marketplace where trading platform participants may trade, buy and sell ETH based on bid-ask trading.

“ Digital Asset Trading Platform ”—An electronic marketplace where trading platform participants may trade, buy and sell Ether based on bid-ask trading.

The largest Digital Asset Trading Platforms are online and typically trade on a 24-hour basis, publishing transaction price and volume data.

“ Digital Asset Trading Platform Market ”—The global exchange market for the trading of ETH, which consists of transactions on electronic Digital Asset Trading Platforms.

“ Digital Asset Trading Platform Market ”—The global trading platform market for the trading of Ether, which consists of transactions on electronic Digital Asset Trading Platforms.

“ Distribution Date ”—July 23, 2024, the distribution date of the shares of the ETH Trust to the Trust’s shareholders in the Initial Distribution.

“ DSTA ”—The Delaware Statutory Trust Act, as amended.

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DTC will act as the securities depository for the Shares.

“ ERISA ”—The Employee Retirement Income Security Act of 1974, as amended.

“ ETC ” or “ Ethereum Classic ”—Ether Classic tokens, which are a type of digital asset based on an open-source cryptographic protocol existing on the Ethereum Classic network.

“ ETH ” or “ Ethereum ”—Ethereum tokens, which are a type of digital asset based on an open source cryptographic protocol existing on the Ethereum Network, comprising units that constitute the assets underlying the Trust’s Shares.

“ Ether ”—Ethereum tokens, which are a type of digital asset based on an open-source cryptographic protocol existing on the Ethereum Network, comprising units that constitute the assets underlying the Trust’s Shares.

“ Ethereum Classic Network ”—The online, end-user-to-end-user network hosting a public transaction ledger, known as the Ethereum Classic blockchain, and the source code comprising the basis for the cryptographic and algorithmic protocols governing the Ethereum Classic network.

“ Ethereum Network ”—The online, end-user-to-end-user network hosting the public transaction ledger, known as the Ethereum Blockchain, and the source code comprising the basis for the cryptographic and algorithmic protocols governing the Ethereum Network.

Business—Overview of the ETH Industry and Market.”

“ Ethereum Proof-of-Work ” or “ ETHPoW ”—A type of digital currency based on an open source cryptographic protocol existing on the Ethereum Proof-of-Work network, which came into existence following the Ethereum hard fork on September 15, 2022.

“ ERISA ”—The Employee Retirement Income Security Act of 1974, as amended.

“ Ethereum Network ”—The online, end-user-to-end-user network hosting the public transaction ledger, known as the Blockchain, and the source code comprising the basis for the cryptographic and algorithmic protocols governing the Ethereum Network.

Business—Overview of the Ethereum Industry and Market.”

“ ETH Trust ”—Grayscale Ethereum Mini Trust ETF.

“ Excess Creation Cash ”—In connection with a creation pursuant to an Actual Execution Cash Order, the amount of excess cash to be returned to the Authorized Participant in the event the price realized in acquiring the corresponding Total Basket Amount is lower than the Total Basket NAV on the trade date.

“ Exchange Act ”—The Securities Exchange Act of 1934, as amended.

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“ FINRA ”—The Financial Industry Regulatory Authority, Inc., which is the primary regulator in the United States for broker-dealers, including Authorized Participants.

“ GAAP ”—United States generally accepted accounting principles.

“ Genesis ”—Genesis Global Trading, Inc., a wholly owned subsidiary of Digital Currency Group, Inc., which served as a Liquidity Provider from October 3, 2022 through September 12, 2023.

“ Grayscale Securities ”—Grayscale Securities, LLC, a wholly owned subsidiary of the Sponsor, which as of the date of this Annual Report, is the only acting Authorized Participant.

“ Incidental Rights ”—Rights to acquire, or otherwise establish dominion and control over, any virtual currency or other asset or right, which rights are incident to the Trust’s ownership of ETH and arise without any action of the Trust, or of the Sponsor or Trustee on behalf of the Trust.

“ FSMA ”—The Financial Services and Markets Act 2023.

“ FTX ”—FTX Trading Ltd.

“ Genesis ”—Genesis Global Trading, Inc., a wholly owned subsidiary of Digital Currency Group, Inc.

“ Grayscale Securities ”—Grayscale Securities, LLC, a wholly owned subsidiary of GSI until December 31, 2024, and GSO thereafter, which served as the Authorized Participant from October 3, 2022 through July 22, 2024.

“ GSI ”—Grayscale Investments, LLC, the Sponsor of the Trust until December 31, 2024.

“ GSIS ”—Grayscale Investments Sponsors, LLC, a Delaware limited liability company, the Sponsor of the Trust from and after January 1, 2025, and a wholly owned direct subsidiary of Grayscale Operating, LLC.

“ GSO ”—Grayscale Operating, LLC, a Delaware limited liability company and a wholly owned indirect subsidiary of Digital Currency Group, Inc.

“ GSOIH ”—GSO Intermediate Holdings Corporation, a Delaware corporation formed in connection with the Reorganization which is the sole managing member of GSO, and an indirect subsidiary of DCG.

“ ICE ”—Intercontinental Exchange.

“ Incidental Rights ”—Rights to acquire, or otherwise establish dominion and control over, any virtual currency or other asset or right, which rights are incident to the Trust’s ownership of Ether and arise without any action of the Trust, or of the Sponsor or Trustee on behalf of the Trust.

“ Index ”—The CoinDesk Ether Price Index (ETX).

“ Index License Agreement ”—The license agreement, dated as of February 1, 2022, between the Index Provider and the Sponsor governing the Sponsor’s use of the Index for calculation of the Index Price, as amended by Amendment No.

1 thereto and as the same may be amended from time to time.

“ Index Price ”—The U.S.

dollar value of an ETH derived from the Digital Asset Trading Platforms that are reflected in the Index, calculated at 4:00 p.m., New York time, on each business day.

Business—Overview of the ETH Industry and Market—ETH Value—The Index and the Index Price” for a description of how the Index Price is calculated.

For purposes of the Trust Agreement, the term ETH Index Price shall mean the Index Price as defined herein.

dollar value of an Ether token derived from the Digital Asset Trading Platforms that are reflected in the Index, calculated at 4:00 p.m., New York time, on each business day.

Business—Overview of the Ethereum Industry and Market—Ether Value—The Index and the Index Price” for a description of how the Index Price is calculated.

For purposes of the Trust Agreement, the term Ether Index Price shall mean the Index Price as defined herein.

“ Index Provider ”—CoinDesk Indices, Inc., a Delaware corporation that publishes the Index.

Prior to its sale to an unaffiliated third party on November 20, 2023, DCG was the indirect parent company of CoinDesk Indices, Inc.

As a result, CoinDesk Indices, Inc.

was an affiliate of the Sponsor and the Trust and was considered a related party of the Trust.

“ In-Kind Order ”—An order for the creation or redemption of Shares pursuant to which the Authorized Participant (or its AP Designee) will deliver or receive Ether directly from the Trust’s Vault Balance.

Because In-Kind Regulatory Approval has not been obtained, at this time Shares will not be created or redeemed through In-Kind Orders.

“ In-Kind Regulatory Approval ”—The necessary regulatory approval to permit NYSE Arca to list the Shares of the Trust utilizing a structure that allows the Trust to create and redeem Shares via in-kind transactions with Authorized Participants or their AP Designees in exchange for Ether.

In common with other spot digital asset exchange-traded products, the Trust is not at this time able to create and redeem shares via in-kind transactions with Authorized Participants, and there has yet to be definitive regulatory guidance on whether and how registered broker-dealers can hold and deal in Ether in compliance with the federal securities laws.

To the extent further regulatory clarity emerges, the Sponsor expects NYSE Arca to seek the necessary regulatory approval to amend its listing rules to permit the Trust to create and redeem Shares through In-Kind Orders.

There can be no assurance as to when such regulatory clarity will emerge, or when NYSE Arca will seek or obtain such regulatory approval, if at all.

“ Initial Distribution ”—The contribution by the Trust of 292,262.98913350 Ether to the ETH Trust, in exchange for 310,158,500 newly created shares of the ETH Trust, which were distributed on the Distribution Date to the Trust’s shareholders as of the Record Date, pro rata based on a 1:1 ratio.

“ Investment Advisers Act ”—Investment Advisers Act of 1940, as amended.

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“ Investor ”—Any investor that has entered into a subscription agreement with an Authorized Participant, pursuant to which such Authorized Participant will act as agent for the investor.

“ IRAs ”—Individual retirement accounts.

“ IR Virtual Currency ”—Any virtual currency tokens, or other asset or right, acquired by the Trust through the exercise (subject to the applicable provisions of the Trust Agreement) of any Incidental Right.

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Department of the Treasury.

“ ISG ”—The Intermarket Surveillance Group.

“ KYC ”—Know-your-customer.

“ Layer 1 ”—The underlying smart contract platform blockchain on which Ethereum functions.

“ Layer 2 ”—Protocols built on top of an underlying smart contract platform blockchain intended to provide scalability to the underlying blockchain by increasing transaction efficiency.

“ Liquidity Provider ”—A service provider that facilitates the purchase of ETH in connection with the creation of Baskets.

“ Liquidity Engager ”—Until December 31, 2024, Grayscale Investments, LLC, and on or after January 1, 2025, Grayscale Investments Sponsors, LLC, in each case acting other than in its capacity as Sponsor, and in its capacity to engage one or more Liquidity Providers.

“ Liquidity Provider ”—One or more eligible companies that facilitate the purchase and sale of Ether in connection with creations or redemptions pursuant to Cash Orders.

The Liquidity Providers with which Grayscale Investments Sponsors, LLC, acting in its capacity as the Liquidity Engager, will engage in Ether transactions are third parties that are not affiliated with the Sponsor or the Trust and are not acting as agents of the Trust, the Sponsor, or any Authorized Participant, and all transactions will be done on an arms-length basis.

Except for the contractual relationships between each Liquidity Provider and Grayscale Investments Sponsors, LLC in its capacity as the Liquidity Engager, there is no contractual relationship between each Liquidity Provider and the Trust, the Sponsor, or any Authorized Participant.

“ Marketing Agent ”—Foreside Fund Services, LLC.

“ Marketing Agent Agreement ”—An agreement entered into by the Sponsor, on behalf of the Trust, dated May 14, 2024, with Foreside Fund Services, LLC.

“ Marketing Fee ”—Fee payable to the marketer for services it provides to the Trust, which the Sponsor will pay to the marketer as a Sponsor-paid Expense.

“ Merge ”—The Ethereum Network, which was initially known as “Ethereum 2.0.” and was completed on September 15, 2022.

“ Merger ”—The merger of Grayscale Investments, LLC with and into Grayscale Operating, LLC, with Grayscale Operating, LLC continuing as the surviving company.

“ MiCA ”—The Markets in Crypto-Assets Regulation, which was approved by the Parliament of the European Union in 2023.

“ MSB ”—A money services business.

“ NAV ”—The aggregate value, expressed in U.S.

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dollars or other fiat currency), less its liabilities (which include estimated accrued but unpaid fees and expenses), a non-GAAP metric, calculated in the manner set forth under “Item 1.

Business—Valuation of ETH and Determination of NAV.” See also “Item 1.

Business—Investment Objective” for a description of the Trust’s Principal Market NAV, as calculated in accordance with GAAP.

Business—Valuation of Ether and Determination of NAV.” See also “Item 1.

Business—Investment Objective” for a description of the Trust’s Principal Market NAV, as calculated in accordance with U.S.

Prior to February 23, 2024, NAV was referred to as Digital Asset Holdings.

For purposes of the Trust Agreement, the term ETH Holdings shall mean the NAV as defined herein.

“ NAV Fee Basis Amount ”—The amount on which the Sponsor’s Fee for the Trust is based, as calculated in the manner set forth under “Item 1.

Business—Valuation of ETH and Determination of NAV”.

For purposes of the Trust Agreement, the term ETH Holdings Basis Amount shall mean the NAV Fee Basis Amount as defined herein.

“ OTCQX ”—The OTCQX tier of OTC Markets Group Inc.

“ Participant Agreement ”—An agreement entered into by an Authorized Participant with the Sponsor that provides the procedures for the creation of Baskets and for the delivery of ETH required for Creation Baskets.

“ Pre-Creation Abandonment ”—The abandonment by the Trust, irrevocably for no direct or indirect consideration, all Incidental Rights and IR Virtual Currency to which the Trust would otherwise be entitled, effective immediately prior to a Creation Time for the Trust.

“ Pre-Creation Abandonment Notice ”—A notice delivered by the Sponsor to the Custodian, on behalf of the Trust, stating that the Trust is abandoning irrevocably for no direct or indirect consideration, effective immediately prior to each Creation Time, all Incidental Rights and IR Virtual Currency to which it would otherwise be entitled as of such time and with respect to which the Trust has not taken any Affirmative Action at or prior to such time.

“ Principal Market NAV ”—The net asset value of the Trust determined on a GAAP basis.

Business—Valuation of Ether and Determination of NAV”.

“ Non-ERISA Arrangements ”—Government plans, non-U.S.

plans and certain church plans, which are not subject to the fiduciary responsibility or prohibited transaction provisions of ERISA or Section 4975 of the Code, but may be subject to similar rules under Similar Laws.

“ NYSE Arca ”—NYSE Arca, Inc.

“ OTCQX ”—The OTCQX Best Market ® of OTC Markets Group Inc.

“ Participant Agreement ”—An agreement entered into by an Authorized Participant with the Sponsor and the Transfer Agent, that provides the procedures for the creation and redemption of Baskets via a Liquidity Provider.

“ Plan Asset Regulations ”—The Department of Labor’s regulations at section 2510.3-101, as amended by Section 3(42) of ERISA.

“ Plans ”—Employee benefit plans and certain other plans and arrangements, including IRAs and annuities, Keogh plans, and certain collective investment funds or insurance company general or separate accounts in which such plans or arrangements are invested, that are subject to ERISA and/or the Section 4975 of the Code.

“ Pre-Creation/Redemption Abandonment ”—The abandonment by the Trust, irrevocably for no direct or indirect consideration, all Incidental Rights and IR Virtual Currency to which the Trust would otherwise be entitled, effective immediately prior to a Creation Time or a Redemption Time (as the case may be) for the Trust.

“ Pre-Creation/Redemption Abandonment Notices ”—A notice, as amended or supplemented from time to time, delivered by the Sponsor to each of the Prime Broker, the Custodian and Coinbase Credit, on behalf of the Trust, stating that the Trust will abandon, irrevocably and for no direct or indirect consideration, effective immediately prior to each Creation Time and each Redemption Time for the Trust, all Incidental Rights and IR Virtual Currency to which it would otherwise be entitled as of such time and with respect to which the Trust has not taken any Affirmative Action at or prior to such time.

“ Prime Broker ”—Coinbase, Inc.

“ Prime Broker Agreement ”—The Prime Broker Agreement, dated as of May 22, 2024, by and among the Trust, the Sponsor and the Prime Broker, on behalf of itself, the Custodian and Coinbase Credit, that governs the Trust’s and the Sponsor’s use of the Custodial and Prime Broker Services provided by the Custodian and the Prime Broker.

“ Principal Market NAV ”—The net asset value of the Trust determined on a U.S.

Prior to February 23, 2024, Principal Market NAV was referred to as NAV.

“ Record Date ”—July 18, 2024, the record date for the Initial Distribution.

“ Redemption Cash Shortfall ”—In connection with a redemption pursuant to an Actual Execution Cash Order, the amount by which the cash to be delivered to the Authorized Participant is reduced in the event the price realized in disposing the corresponding Total Basket Amount is lower than the Total Basket NAV on the trade date.

“ Redemption Time ”—With respect to the redemption of any Shares by the Trust, the time at which the Trust redeems such Shares.

“ Reorganization ”—The internal corporate reorganization of Grayscale Investments, LLC consummated on January 1, 2025.

“ Required Redemption Cash ”—The actual proceeds to the Trust from the liquidation of the Total Basket Amount.

“ SEC ”—The U.S.

Securities and Exchange Commission.

“ Secondary Market ”—Any marketplace or other alternative trading system, as determined by the Sponsor, on which the Shares may then be listed, quoted or traded, including but not limited to, the OTCQX tier of the OTC Markets Group Inc.

“ Secondary Index ”—The Coin Metrics Real-Time Rate.

“ Secondary Index Price ”—The price set by Coin Metrics Real-Time Rate as of 4:00 p.m., New York time, on the valuation date.

Business—Overview of the Ethereum Industry and Market—Ether Value—The Index and the Index Price—Determination of the Index Price When Index Price is Unavailable” for a description of how the Secondary Index Price is utilized when the Index Price is unavailable.

“ Secondary Index Provider ”—Coin Metrics Inc., a Delaware corporation that publishes the Secondary Index.

“ Securities Act ”—The Securities Act of 1933, as amended.

“ Settlement Balance ”—An account controlled and maintained by the Custodian to which cash and digital assets of the Trust are credited on the Trust’s behalf.

“ Shares ”—Common units of fractional undivided beneficial interest in, and ownership of, the Trust.

“ Share Split ”—A 9-for-1 Share split of the Trust’s issued and outstanding Shares, which was effective on December 17, 2020 to shareholders of record as of the close of business on December 14, 2020.

“ Share Percentage ”—A fraction the numerator of which is the number of Shares disposed of and the denominator of which is the total number of Shares held by such U.S.

Holder immediately prior to such sale or other disposition.

“ Share Split ”—A 9-for-1 Share split of the Trust’s issued and outstanding Shares, which was effected on December 17, 2020 to shareholders of record as of the close of business on December 14, 2020.

“ Similar Laws ”—Rules under other federal, state, local, non-U.S.

or other applicable law that are similar to ERISA or Section 4975 of the Code.

“ SIPC ”—The Securities Investor Protection Corporation.

“ Sponsor ”—Grayscale Investments, LLC.

“ Sponsor ” or “ Co-Sponsor ”—The sponsor of the Trust.

Grayscale Investments, LLC was the sponsor of the Trust before January 1, 2025, Grayscale Operating, LLC is a co-sponsor of the Trust from January 1, 2025 to May 3, 2025, and Grayscale Investments Sponsors, LLC is a co-sponsor of the Trust from January 1, 2025 to May 3, 2025 and will be the sole remaining sponsor thereafter.

“ Sponsor Contracts ”—Certain contracts assigned by GSO pertaining to its role as Sponsor (as such term is defined in the Trust Agreement) of the Trust to GSIS in connection with the Reorganization.

“ Sponsor-paid Expenses ”—The fees and expenses incurred by the Trust in the ordinary course of its affairs that the Sponsor is obligated to assume and pay, excluding taxes, but including:

(i) the Marketing Fee, (ii) the Administrator Fee, (iii) the Custodian Fee and fees for any other security vendor engaged by the Trust, (iv) the Transfer Agent fee, (v) the Trustee fee, (vi) the fees and expenses related to the listing, quotation or trading of the Shares on any Secondary Market (including customary legal, marketing and audit fees and expenses) in an amount up to $600,000 in any given fiscal year, (vii) ordinary course, legal fees and expenses, (viii) audit fees, (ix) regulatory fees, including, if applicable, any fees relating to the registration of the Shares under the Securities Act or the Exchange Act, (x) printing and mailing costs, (xi) costs of maintaining the Trust’s website and (xii) applicable license fees, provided that any expense that qualifies as an Additional Trust Expense will be deemed to be an Additional Trust Expense and not a Sponsor-paid Expense.

“ Sponsor’s Fee ”—A fee, payable in ETH, which accrues daily in U.S.

“ Sponsor’s Fee ”—A fee, payable in Ether, which accrues daily in U.S.

dollars at an annual rate of 2.5% of the NAV Fee Basis Amount of the Trust as of 4:00 p.m., New York time, on each day;

provided that for a day that is not a business day, the calculation of the Sponsor’s Fee will be based on the NAV Fee Basis Amount from the most recent business day, reduced by the accrued and unpaid Sponsor’s Fee for such most recent business day and for each day after such most recent business day and prior to the relevant calculation date.

“ Total Basket Amount ”—With respect to any creation order, the applicable Basket Amount multiplied by the number of Baskets being created.

“ Staking ”—Using Ether, or permitting Ether to be used, directly or indirectly, through an agent or otherwise, in the Ethereum Network’s proof-of-stake validation protocol, in exchange for the receipt of consideration, including, but not limited to, staking rewards paid in fiat currency or paid in kind.

“ Tertiary Pricing Option ”—The price set by the Trust’s principal market.

“ Total Basket Amount ”—With respect to any creation or redemption order, the applicable Basket Amount multiplied by the number of Baskets being created or redeemed.

“ Total Basket NAV ”—The applicable Basket NAV Amount multiplied by the number of Baskets being created or redeemed.

“ Transfer Agency and Service Agreement ”—The agreement between the Sponsor and the Transfer Agent which sets forth the obligations and responsibilities of the Transfer Agent with respect to transfer agency services and related matters.

“ Transfer Agent ”—Continental Stock Transfer & Trust Company, a Delaware corporation.

“ Transfer Agent ”—The Bank of New York Mellon, a New York corporation authorized to conduct banking business.

“ Transfer Agent Fee ”—Fee payable to the Transfer Agent for services it provides to the Trust, which the Sponsor will pay to the Transfer Agent as a Sponsor-paid Expense.

“ Treasury Regulations ”—The regulations, including proposed or temporary regulations, promulgated under the Code.

“ Trust ”—Grayscale Ethereum Trust (ETH), a Delaware statutory trust, formed on December 13, 2017 under the DSTA and pursuant to the Trust Agreement.

“ Trust Agreement ”—The Amended and Restated Declaration of Trust and Trust Agreement between the Trustee and the Sponsor establishing and governing the operations of the Trust, as amended by Amendments No.

2 thereto and as the same may be amended from time to time.

“ Trustee ”—Delaware Trust Company (formerly known as CSC Trust Company of Delaware), a Delaware trust company, is the Delaware trustee of the Trust.

“ Trust ”—Grayscale Ethereum Trust ETF, a Delaware statutory trust, formed on December 13, 2017 under the DSTA and pursuant to the Trust Agreement.

“ Trust Agreement ”—The Second Amended and Restated Declaration of Trust and Trust Agreement, dated as of June 12, 2024, between the Trustee and the Sponsor establishing and governing the operations of the Trust, as amended by Amendment No.

1 thereto and as the same may be further amended from time to time.

“ Trustee ”—CSC Delaware Trust Company (formerly known as Delaware Trust Company), a Delaware trust company, is the Delaware trustee of the Trust.

“ UBTI ”—Unrelated business taxable income.

“ Uplisting Date ”—July 23, 2024, the date on which the shares of Grayscale Ethereum Trust ETF began trading on NYSE Arca as shares of an exchange-traded product.

”—United States.

dollar ” or “ $ ”—United States dollar or dollars.

GAAP ”—United States generally accepted accounting principles.

“ Variable Fee ”—An amount in cash based on the Total Basket NAV, which shall be paid by the Authorized Participant in connection with Variable Fee Cash Orders.

The amount may be changed by the Sponsor in its sole discretion at any time.

“ Variable Fee Cash Order ”—A Cash Order pursuant to which any price differential between (x) the Total Basket NAV on the trade date and (y) the price realized in acquiring or disposing of the corresponding Total Basket Amount, as the case may be, will be borne solely by the applicable Liquidity Provider.

“ Vault Balance ”—A segregated custody account controlled and secured by the Custodian to store private keys, which allow for the transfer of ownership or control of the Trust’s Ether on the Trust’s behalf.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned in the capacities* indicated, thereunto duly authorized.

Grayscale Investments, LLC

as Sponsor of Grayscale Ethereum Trust (ETH)

/s/ Michael Sonnenshein

Michael Sonnenshein

Grayscale Investments Sponsors, LLC, as Sponsor

of Grayscale Ethereum Trust ETF

/s/ Peter Mintzberg

Peter Mintzberg

Member of the Board of Directors and Chief Executive Officer (Principal Executive Officer)*

/s/ Edward McGee

Member of the Board of Directors and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)*

Member of the Board of Directors and Chief Financial Officer (Principal Financial and Accounting Officer)*

/s/ Mark Shifke

4 unchanged sentences

February 27, 2025

* The Registrant is a trust and the persons are signing in their capacities as officers or directors of Grayscale Investments, LLC, the Sponsor of the Registrant.

* The Registrant is a trust and the persons are signing in their capacities as officers of Grayscale Operating, LLC, the sole member of Grayscale Investments Sponsors, LLC, the Sponsor of the Registrant, or directors of GSO Intermediate Holdings Corporation, the sole managing member of Grayscale Operating, LLC, as applicable.

INDEX TO FINANCIAL STATEMENTS

Grayscale Ethereum Trust (ETH) Annual Financial Statements

Reports of Independent Registered Public Accounting Firms (Marcum LLP, PCAOB ID 688 ;

Friedman LLP, PCAOB ID 711 )

Grayscale Ethereum Trust ETF Annual Financial Statements

Reports of Independent Registered Public Accounting Firms (KPMG LLP, PCAOB ID 185;

Marcum LLP, PCAOB ID 688 )

Statements of Assets and Liabilities at December 31, 2024 and 2023

2 unchanged sentences

Statements of Changes in Net Assets for the Years Ended December 31, 2024, 2023 and 2022

Statement of Cash Flows for the Year Ended December 31, 2024

Notes to Financial Statements

1 unchanged sentence

To the Shareholders and Sponsor of

Grayscale Ethereum Trust (ETH)

Grayscale Ethereum Trust ETF:

Opinion on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of investment, of Grayscale Ethereum Trust (ETH) (the “Trust”) as of December 31, 2023 and 2022, and the related statements of operations and changes in net assets for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Trust as of December 31, 2023 and 2022, and the results of its operations for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Trust’s internal control over financial reporting as of December 31, 2023, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013 and our report dated February 23, 2024, expressed an unqualified opinion on the effectiveness of the Trust’s internal control over financial reporting.

We have audited the accompanying statement of assets and liabilities, including the schedule of investment of Grayscale Ethereum Trust ETF (the Trust) as of December 31, 2024, and the related statements of operations, changes in net assets, and cash flows for the year then ended, and the related notes (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Trust as of December 31, 2024, and the results of its operations, changes in its net assets, and its cash flows for the year then ended, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Trust’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2025 expressed an unqualified opinion on the effectiveness of the Trust’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the management of the Trust’s Sponsor, Grayscale Investments, LLC.

Our responsibility is to express an opinion on the Trust’s financial statements based on our audits.

These financial statements are the responsibility of the Trust’s management.

Our responsibility is to express an opinion on these financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Trust in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of audit evidence pertaining to the existence, rights and control of digital assets

We identified the evaluation of audit evidence pertaining to the existence of digital assets and whether the Trust controls and has the rights to the digital assets as a critical audit matter.

Subjective auditor judgment was involved in determining the nature and extent of evidence required to assess the existence of digital assets and whether the Trust controls and has the rights to the digital assets.

Control over the digital assets is proven through access to private cryptographic keys stored using third-party custodial services.

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of the existence and rights over the investment in Ether

As discussed in Notes 2 and 3 to the financial statements, the Trust accounts for its investment in Ether at fair value in accordance with its classification as an investment company for accounting purposes.

As of December 31, 2024, the fair value of the Trust’s investment in Ether was $4.7 billion, with a respective cost basis of $0.6 billion.

We identified the evaluation of the existence of and the Trust’s rights to Ether, including the risk that the Trust’s investment in Ether may not be owned by the Trust, as a critical audit matter.

A high degree of auditor judgment was involved in determining the nature and extent of the procedures performed and audit evidence obtained to assess the existence of and the Trust’s rights to its investment in Ether, as control and access over the Ether was provided through private cryptographic keys stored using third-party custodial services.

In addition, auditor judgement was required to evaluate the sufficiency of audit evidence obtained.

The following are the primary procedures we performed to address this critical audit matter.

We consulted with subject matter experts regarding our planned audit response to address risks of material misstatement of digital assets.

We evaluated and tested the design and operating effectiveness of certain internal controls over digital assets, including controls over the comparison of the Trust’s records of digital assets held to the custodial records.

We evaluated the sufficiency of the design and operating effectiveness of internal controls at the custodian, including the processes surrounding private key lifecycle management, the storage of private keys and the authorization of digital asset transactions by evaluating service and subservice organization reports.

We obtained confirmation from the custodian of the Trust’s digital assets as of December 31, 2023, and compared the total digital assets confirmed to the Trust’s record of digital asset holdings.

We also compared the Trust’s record of digital asset holdings to the records on the public blockchain and evaluated the reliability of audit evidence obtained from public blockchains.

We tested movements on the blockchain to evidence that the Trust

controls the digital assets through the custodian account.

We evaluated the sufficiency and appropriateness of audit evidence obtained by assessing the results of procedures performed over the digital assets.

/s/ Marcum LLP

We have served as the Trust’s auditor since 2018 (such date takes into account the acquisition of certain assets of Friedman LLP by Marcum LLP effective September 1, 2022).

We evaluated the design and tested the operating effectiveness of certain internal controls over the existence of the Trust’s investment in Ether and the Trust’s rights over its investment in Ether, including controls over the comparison of the Trust’s records of Ether held to the third-party custodial records.

We involved information technology professionals with specialized skills and knowledge in blockchain technology, who assisted in evaluating certain internal controls over the safeguarding of digital assets process performed at the third-party custodian, specifically related to the generation of the private cryptographic keys, the storing of these keys, and the reconciliation of digital assets per the custodial service ledgers to the public blockchain.

We obtained confirmation of the Trust’s investment in Ether held with the third-party custodian as of December 31, 2024 and compared the results of the confirmation to the Trust’s record of its investment in Ether.

compared the Trust’s record for a selection of on blockchain Ether purchase and sale transactions to the records on the public blockchain using a software audit tool.

We also obtained and assessed evidence that such transactions were appropriately authorized and that the Trust controlled the Ether through the third-party custodian.

We evaluated the reliability of audit evidence obtained from the public blockchain.

We also assessed the sufficiency of audit evidence obtained by evaluating the cumulative results of the audit procedures.

We have served as the Trust’s auditor since 2024.

New York, New York

February 27, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Sponsor of

Grayscale Ethereum Trust (ETH)

Grayscale Ethereum Trust ETF:

Opinion on Internal Control Over Financial Reporting

We have audited Grayscale Ethereum Trust (ETH)’s (the “Trust”) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have audited Grayscale Ethereum Trust ETF's (the Trust) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Trust maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the statements of assets and liabilities, including the schedules of investment, of the Trust as of December 31, 2023 and 2022, and the related statements of operations and changes in net assets and the related notes for each of the two years in the period ended December 31, 2023, of the Trust (collectively referred to as the “financial statements”) and our report dated February 23, 2024, expressed an unqualified opinion on those financial statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the statement of assets and liabilities, including the schedule of investment, of the Trust as of December 31, 2024, the related statements of operations, changes in net assets, and cash flows for the year then ended, and the related notes (collectively, the financial statements), and our report dated February 27, 2025 expressed an unqualified opinion on those financial statements.

Basis for Opinion

The management of Grayscale Investments, LLC (the Trust’s Sponsor) is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.

The Trust’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Trust’s internal control over financial reporting based on our audit.

7 unchanged sentences

Definition and Limitations of Internal Control Over Financial Reporting

An entity’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

An entity’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the entity;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the entity are being made only in accordance with authorizations of management and directors of the entity;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the entity’s assets that could have a material effect on the financial statements.

Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that degree of compliance with the policies or procedures may deteriorate.

/s/ Marcum LLP

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

New York, New York

2 unchanged sentences

To the Shareholders and Sponsor of

Grayscale Ethereum Trust (ETH)

Grayscale Ethereum Trust ETF

Opinion on the Financial Statements

We have audited the statements of operations and changes in net assets of Grayscale Ethereum Trust (ETH) (the “Trust”) for the year ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the results of the Trust’s operations for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying statements of assets and liabilities, including the schedule of investment, of Grayscale Ethereum Trust ETF (the “Trust”) as of December 31, 2023, and the related statements of operations and changes in net assets for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Trust as of December 31, 2023, and the results of its operations for each of the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the management of the Trust’s Sponsor, Grayscale Investments, LLC.

Our responsibility is to express an opinion on the Trust’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Trust in accordance with the U.S.