What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-05-07 compared with 2020-11-06 · 51 added, 56 removed, 252 unchanged (30% of the section changed)

1 unchanged sentence

GRAYSCALE ETHEREUM TRUST (ETH)

STATEMENTS OF ASSETS AND LIABILITIES

September 30, 2020

STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)

( Amounts in thousands, except Share amounts)

March 31, 2021

December 31, 2020

(Amounts in U.S.

dollars, except Share amounts)

Investment in Ethereum, at fair value (cost $ 571,502,927 and $ 129,816,491 as of September 30, 2020 and December 31, 2019, respectively)

Investment in Ethereum, at fair value (cost $ 1,333,448 and $ 905,880 as of March 31, 2021 and December 31, 2020, respectively)

Sponsor's Fee payable, related party

3 unchanged sentences

Accumulated net investment loss

Accumulated net realized loss on investment in Ethereum

Accumulated net change in unrealized appreciation (depreciation) on investment in Ethereum

Accumulated net realized gain on investment in Ethereum

Accumulated net change in unrealized appreciation on investment in Ethereum

Shares issued and outstanding, no par value (unlimited Shares authorized)

2 unchanged sentences

GRAYSCALE ETHEREUM TRUST (ETH)

SCHEDULES OF INVESTMENT

September 30, 2020

SCHEDULES OF INVESTMENT (UNAUDITED)

( Amounts in thousands, except quantity of Ethereum and percentages)

March 31, 2021

Investment in Ethereum

5 unchanged sentences

GRAYSCALE ETHEREUM TRUST (ETH)

STATEMENTS OF OPERATIONS

Three Months Ended

September 30,

Nine Months Ended

September 30,

(Amounts in U.S.

STATEMENTS OF OPERATIONS (UNAUDITED)

( Amounts in thousands)

Three Months Ended March 31,

Investment income:

4 unchanged sentences

Net realized gain (loss) on investment in Ethereum

Net change in unrealized depreciation (appreciation) on Sponsor's Fee payable

Net change in unrealized appreciation (depreciation) on investment in Ethereum

3 unchanged sentences

GRAYSCALE ETHEREUM TRUST (ETH)

STATEMENT OF CHANGES IN NET ASSETS

Three Months Ended

September 30,

Nine Months Ended

September 30,

(Amounts in U.S.

dollars, except change in Shares outstanding)

STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)

( Amounts in thousands, except change in Shares outstanding)

Three Months Ended March 31,

Increase (decrease) in net assets from operations:

1 unchanged sentence

Net realized gain (loss) on investment in Ethereum

Net change in unrealized depreciation (appreciation) on Sponsor's Fee payable

Net change in unrealized appreciation (depreciation) on investment in Ethereum

28 unchanged sentences

The Sponsor also acts as the sponsor and manager of other investment products including Grayscale Bitcoin Trust (BTC) (OTCQX:

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

BCHG), Grayscale Ethereum Classic Trust (ETC) (OTCQX:

ETCG), Grayscale Horizen Trust (ZEN), Grayscale Litecoin Trust (LTC) (Symbol:

LTCN), Grayscale Stellar Lumens Trust (XLM), Grayscale XRP Trust (XRP), Grayscale Zcash Trust (ZEC) and Grayscale Digital Large Cap Fund LLC (OTCQX:

GBTC), Grayscale Basic Attention Token Trust (BAT), Grayscale Bitcoin Cash Trust (BCH) (OTCQX:

BCHG), Grayscale Chainlink Trust (LINK), Grayscale Decentraland Trust (MANA), Grayscale Ethereum Classic Trust (ETC) (OTCQX:

ETCG), Grayscale Filecoin Trust (FIL), Grayscale Horizen Trust (ZEN), Grayscale Litecoin Trust (LTC) (OTCQX:

LTCN), Grayscale Livepeer Trust (LPT), Grayscale Stellar Lumens Trust (XLM), Grayscale Zcash Trust (ZEC) and Grayscale Digital Large Cap Fund LLC (OTCQX:

GDLC), each of which is an affiliate of the Trust.

13 unchanged sentences

The Trust’s trading symbol on OTCQX is “ETHE” and the CUSIP number for its Shares is 389638107 .

On December 17, 2020, the Trust completed a 9 -for-1 Share Split of the Trust’s issued and outstanding Shares.

Each beneficial owner of a Share (a “shareholder”) of record as of the close of business on December 14, 2020 received eight additional Shares of the Trust for each Share held.

The number of outstanding Shares and per-Share amounts disclosed for all periods presented have been retroactively adjusted to reflect the effects of the Share Split.

Summary of Significant Accounting Policies

In the opinion of management of the Sponsor of the Trust, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position as of September 30, 2020 and December 31, 2019 and results of operations for the three and nine months ended September 30, 2020 and 2019 have been made.

The results of operations for the periods presented are not necessarily indicative of the results of operations expected for the full year.

These unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2019 included in the Information Statement.

In the opinion of management of the Sponsor of the Trust, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position as of March 31, 2021 and December 31, 2020 and results of operations for the three months ended March 31, 2021 and 2020 have been made.

The results of operations for the periods presented are not necessarily indicative of the results

of operations expected for the full year.

These unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2020 included in the Company’s Annual Report on Form 10-K .

The following is a summary of significant accounting policies followed by the Trust:

49 unchanged sentences

Fair Value Measurement Using

September 30, 2020

(Amounts in thousands)

March 31, 2021

Investment in ETH

3 unchanged sentences

ETH is held by the Custodian on behalf of the Trust and is carried at fair value.

As of September 30, 2020, and December 31, 2019, the Trust held 2,262,491.87824898 and 496,952.80257193 ETH, respectively.

The Trust determined the fair value per ETH to be $ 355.34 and $ 127.86 on September 30, 2020 and December 31, 2019, respectively, using the price provided at 4:00 p.m., New York time, by the Digital Asset Exchange Market considered to be the Trust’s principal market (Coinbase Pro).

As of March 31, 2021, and December 31, 2020, the Trust held 3,173,754.24960796 and 2,937,122.40311770 ETH, respectively.

The Trust determined the fair value per ETH to be $ 1,899.98 and $ 744.99 on March 31, 2021 and December 31, 2020, respectively, using the price provided at 4:00 p.m., New York time, by the Digital Asset Exchange Market considered to be the Trust’s principal market (Coinbase Pro).

The following represents the changes in quantity of ETH and the respective fair value:

(Amounts in thousands, except Ethereum amounts)

Balance at January 1, 2020

4 unchanged sentences

( 41,593.77800361

Net change in unrealized depreciation on investment in ETH

Net realized loss on investment in ETH

Net change in unrealized appreciation on investment in ETH

Net realized gain on investment in ETH

Balance at December 31, 2020

6 unchanged sentences

Net realized gain on investment in ETH

Balance at September 30, 2020

Balance at March 31, 2021

3,173,754.24960796

Creations and Redemptions of Shares

At September 30, 2020 and December 31, 2019, there were an unlimited number of Shares authorized by the Trust.

At March 31, 2021 and December 31, 2020, there were an unlimited number of Shares authorized by the Trust.

The Trust creates (and, should the Trust commence a redemption program, redeems) Shares from time to time, but only in one or more Baskets.

2 unchanged sentences

dollar value of accrued but unpaid fees and expenses of the Trust, by (y) the number of Shares outstanding at such time and multiplying the quotient obtained by 100.

Each Share represented approximately 0.0932 and 0.0950 of one ETH at September 30, 2020 and December 31, 2019, respectively.

Each Share represented approximately 0.0102 and 0.0103 of one ETH at March 31, 2021 and December 31, 2020, respectively.

The cost basis of investments in ETH recorded by the Trust is the fair value of ETH, as determined by the Trust, at 4:00 p.m., New York time, on the date of transfer to the Trust by the Authorized Participant based on the creation Baskets.

22 unchanged sentences

Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current period.

As of and during the periods ended September 30, 2020 and December 31, 2019, the Trust did not have a liability for any unrecognized tax

However, the Sponsor’s conclusions concerning its determination of “more-likely-than-not” tax positions may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance, and on-going analyses of and changes to tax laws, regulations and interpretations thereof .

The Sponsor of the Trust has evaluated whether or not there are uncertain tax positions that require financial statement recognition and has determined that no reserves for uncertain tax positions related to federal, state and local income taxes existed as of September 30, 2020 or December 31, 2019.

As of and during the periods ended March 31, 2021 and December 31, 2020, the Trust did not have a liability for any unrecognized tax amounts.

the Sponsor’s conclusions concerning its determination of “more-likely-than-not” tax positions may be subject to review and adjustment at a later date based on factors including, but not limited to, further implementation guidance, and on-going analyses of and changes to tax laws, regulations and interpretations thereof .

Related Parties

The Trust considers the following entities, their directors, and employees to be related parties of the Trust:

DCG, Genesis, and Grayscale.

As of September 30, 2020 and December 31, 2019, 1,043,298 and 439,606 Shares of the Trust were held by related parties of the Trust, respectively.

DCG, Genesis, Grayscale and TradeBlock, Inc.

As of March 31, 2021 and December 31, 2020, 8,427,917 and 10,803,454 Shares of the Trust were held by related parties of the Trust, respectively.

The Sponsor’s parent, an affiliate of the Trust, holds a minority interest in Coinbase, Inc., the parent company of the Custodian, that represents less than 1.0 % of Coinbase Inc.’s ownership.

7 unchanged sentences

dollar value of ETH is determined by reference to the Digital Asset Exchange Market that the Trust considers its principal market as of 4:00 p.m., New York time, on each valuation date .

The Trust held no Incidental Rights or IR Virtual Currency as of March 31, 2021 and December 31, 2020.

No Incidental Rights or IR Virtual Currencies have been distributed in payment of the Sponsor’s Fee during the three months ended March 31, 2021 and 2020.

As partial consideration for receipt of the Sponsor’s Fee, the Sponsor is obligated under the Trust Agreement to assume and pay all fees and other expenses incurred by the Trust in the ordinary course of its affairs, excluding taxes, but including marketing fees;

11 unchanged sentences

dollars or other fiat currencies at the Actual Exchange Rate or (y) cause the Trust (or its delegate) to deliver such ETH, Incidental Rights and/or IR Virtual Currency in kind in satisfaction of such Additional Trust Expenses.

For the three months ended September 30, 2020 and 2019, the Trust incurred Sponsor’s Fees of $ 4,339,918 and $ 334,288 , respectively.

For the nine months ended September 30, 2020 and 2019, the Trust incurred Sponsor’s Fees of $ 6,870,848 and $ 448,897 , respectively.

As of September 30, 2020 and December 31, 2019, there were no accrued and unpaid Sponsor’s Fees.

For the three months ended March 31, 2021 and 2020, the Trust incurred Sponsor’s Fees of $ 29,270,369 and $ 778,145 , respectively.

As of March 31, 2021 and December 31, 2020, there were no accrued and unpaid Sponsor’s Fees.

In addition, the Sponsor may pay Additional Trust Expenses on behalf of the Trust, which are reimbursable by the Trust to the Sponsor.

For the three and nine months ended September 30, 2020 and 2019, the Sponsor did not pay any Additional Trust Expenses on behalf of the Trust.

For the three months ended March 31, 2021 and 2020, the Sponsor did no t pay any Additional Trust Expenses on behalf of the Trust.

Risks and Uncertainties

29 unchanged sentences

Financial Highlights Per Share Performance

Three Months Ended

September 30,

Nine Months Ended

September 30,

Three Months Ended March 31,

Per Share Data:

2 unchanged sentences

Net investment loss

Net realized and unrealized gain (loss)

Net increase (decrease) in net assets resulting from operations

Net realized and unrealized gain

Net increase in net assets resulting from operations

Net asset value, end of period

2 unchanged sentences

Ratios of net investment loss and expenses to average net assets have been annualized.

An i nd i v i du a l Shareholde r ’ s r eturn , ratios, and per Share performance m a y va r y from those presented above b a s e d on the ti m ing of S h a re t r ansac ti ons.

An i nd i v i du a l s hareholde r ’ s r eturn , ratios, and per Share performance m a y va r y from those presented above b a s e d on the ti m ing of S h a re t r ansac ti ons.

Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period and assuming redemption on the last day of the period and has been annualized.

5 unchanged sentences

Subsequent Events

As of the close of business on November 2, 2020 the fair value of ETH determined in accordance with the Trust’s accounting policy was $ 387.74 per ETH.

As of the close of business on May 3, 2021 the fair value of ETH determined in accordance with the Trust’s accounting policy was $ 3,304.55 per ETH.

There are no known eve nts that have occurred that require disclosure other than that which has already been disclosed in these notes to the financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements