VanEck Ethereum ETF
For the period ended Mar 31, 2025. Filed May 14, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 14, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Item 1. Unaudited Financial Statements
Statement of Assets and Liabilities
| March 31, 2025 (Unaudited) | December 31, 2024 | |
|---|---|---|
| Assets | ||
| Investment in ether, at fair value (cost $142,791,446 and $136,234,086, respectively) | $84,668,819 | $146,428,902 |
| Total assets | 84,668,819 | 146,428,902 |
| Liabilities | ||
| Total liabilities | — | — |
| Net assets | $84,668,819 | $146,428,902 |
| Shares issued and outstanding (no par value, unlimited amount authorized) | 3,150,000 | 3,000,000 |
| Net Asset Value per Share | $26.88 | $48.81 |
Statement of Operations (Unaudited)
| Three Months Ended March 31, 2025(a) | |
|---|---|
| Expenses | |
| Sponsor fee, related party | $60,908 |
| Total expenses | 60,908 |
| Sponsor fee waiver, related party | (60,908) |
| Net expenses | — |
| Net investment loss | — |
| Net realized loss and change in unrealized appreciation (depreciation) | |
| Net realized loss on: | |
| Ether sold for redemption of shares | (1,192,767) |
| Net realized loss from investment in ether | (1,192,767) |
| Net change in unrealized appreciation (depreciation) from investment in ether | (68,317,443) |
| Net realized loss and change in unrealized appreciation (depreciation) | (69,510,210) |
| Net decrease in net assets resulting from operations | $(69,510,210) |
(a)No comparative financial statements have been provided as the Trust did not have any operations as of March 31, 2024.
Statement of Changes in Net Assets (Unaudited)
| Three Months Ended March 31, 2025(a) | |
|---|---|
| Net decrease from operations | |
| Net investment loss | $— |
| Net realized loss from investment in ether | (1,192,767) |
| Change in net unrealized appreciation (depreciation) from investments in ether | (68,317,443) |
| Net decrease in net assets resulting from operations | (69,510,210) |
| Capital Share transactions | |
| Contributions for shares issued | 9,957,156 |
| Withdrawals for shares redeemed | (2,207,029) |
| Total capital share transactions | 7,750,127 |
| Net decrease in net assets | (61,760,083) |
| Net assets: | |
| Beginning of period | 146,428,902 |
| End of period | $84,668,819 |
(a) No comparative financial statements have been provided as the Trust did not have any operations as of March 31, 2024.
Schedule of Investment
| March 31, 2025 (Unaudited) | Quantity of Ether | Cost | Fair Value | % of Net Assets |
|---|---|---|---|---|
| Investment in ether | 46,132.62 | $142,791,446 | $84,668,819 | 100.00% |
| Net Assets | $84,668,819 | 100.00% | ||
| December 31, 2024 | Quantity of Ether | Cost | Fair Value | % of Net Assets |
|---|---|---|---|---|
| Investment in ether | 43,935.83 | $136,234,086 | $146,428,902 | 100.00% |
| Net Assets | $146,428,902 | 100.00% | ||
Notes to Unaudited Financial Statements
Note 1. Organization:
The VanEck Ethereum ETF (the “Trust”), a Delaware statutory trust, is an exchange-traded fund that issues common shares of beneficial interest in an ownership of the Trust (the “Shares”). The Shares are traded on the Cboe BZX Exchange, Inc. (the “Exchange”). The Trust’s investment objective is to reflect the performance of the price of ether (“ETH”) less the net operating expenses of the Trust. The Trust is managed and controlled by VanEck Digital Assets, LLC (the “Sponsor”), a wholly-owned subsidiary of Van Eck Associates Corporation (“VanEck”). The CSC Delaware Trust Company is the “Trustee” of the Trust.
Note 2. Significant Accounting Policies:
| A. | Basis of Preparation and Use of Estimates |
|---|---|
| The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. | |
| The Trust qualifies as an investment company solely for accounting purposes and not for any other purpose and follows accounting and reporting requirements of Accounting Standards Codification (“ASC”) Topic 946 Financial Services—Investment Companies (“ASC Topic 946”), but is not registered, and is not required to be registered, as an investment company under the Investment Company Act of 1940, as amended. | |
| B. | Cash |
| Cash, if any, represents cash deposits held at a major financial institution and is subject to credit risk to the extent its balance exceeds the federally insured limits. As of December 31, 2024 and March 31, 2025, the Trust did not hold cash. | |
| C. | Investment Valuation |
| The Trust values its investment in ETH and other assets and liabilities at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. | |
| The Trust identifies and determines the ETH principal market (or in the absence of a principal market, the most advantageous market) for GAAP financial statement purposes consistent with the application of fair value measurement framework in Financial Accounting Standards Board (“FASB”) ASC 820 at 11:59 p.m. EST. Under ASC 820, a principal market is the market with the greatest volume and activity level for the asset or liability. The Sponsor on behalf of the Trust will determine in its sole discretion the valuation sources and policies used to prepare the Trust’s financial statements in accordance with GAAP. | |
| Various inputs are used in determining the fair value of assets and liabilities. Inputs may be based on independent market data (observable inputs) or they may be internally developed (unobservable inputs). These inputs are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes. The three levels of the fair value hierarchy are as follows: | |
| Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities; | |
| Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not considered to be active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means; and | |
| Level 3 – Unobservable inputs where there are little or no market activity for the asset or liability, including the Trust’s assumptions used in determining the fair value of investments. |
The following is a summary of the fair value hierarchy as of March 31, 2025, and December 31, 2024:
| March 31, 2025 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Assets | ||||
| Investment in ETH | $84,668,819 | $— | $— | $84,668,819 |
| December 31, 2024 | Level 1 | Level 2 | Level 3 | Total |
| Assets | ||||
| Investment in ETH | $146,428,902 | $— | $— | $146,428,902 |
The following represents the changes in quantity of ETH and the respective fair value:
| ETH · Fair Value | ||
|---|---|---|
| Beginning balance as of January 1, 2025 | 43,935.83 | $146,428,902 |
| ETH contributed | 3,295.19 | 9,957,156 |
| ETH withdrawn | (1,098.40) | (2,207,029) |
| Net change in unrealized appreciation (depreciation) from investment in ETH | — | (68,317,443) |
| Net realized loss on investment in ETH | — | (1,192,767) |
| Ending balance as of March 31, 2025 | 46,132.62 | $84,668,819 |
| ETH · Fair Value | ||
|---|---|---|
| Beginning balance as of May 20, 2024(a) | — | $— |
| ETH contributed | 49,793.94 | 154,052,853 |
| ETH withdrawn | (5,858.11) | (16,251,349) |
| Net unrealized appreciation (depreciation) from investment in ETH | — | 10,194,816 |
| Net realized loss on investment in ETH | — | (1,567,418) |
| Ending balance as of December 31, 2024 | 43,935.83 | $146,428,902 |
| (a) | Commencement of Operations, the Trust did not hold any ETH as of May 20, 2024. |
| D. | Ether |
|---|---|
| ETH transactions are accounted for on trade date. Realized gains and losses on the sale of ETH are determined based on the average cost method. Under ASC Topic 946, the average cost method is an accepted method to determine realized gains and losses on the sale of ETH. Proceeds received by the Trust from the issuance of baskets consist of ETH. Deposits of ETH are held by Gemini Trust Company, LLC (the “ETH Custodian”) and are also held at Coinbase Custody Trust Company, LLC (the “Additional ETH Custodian”, and collectively the “ETH Custodians”), on behalf of the Trust until (i) delivered out in connection with redemptions of baskets or cash or (ii) sold by the Sponsor, which may be facilitated by the ETH Custodians, to pay fees due to the Sponsor and Trust expenses and liabilities not assumed by the Sponsor. | |
| E. | Calculation of Net Asset Value |
| The Trust’s net asset value (“NAV”) is calculated based on the Trust’s net asset holdings as reconciled to the ETH Custodians’ accounts on a market approach, determined on a daily basis in accordance with the MarketVectorTM Ethereum Benchmark Rate price at 4:00 pm EST. The Trust’s NAV per Share is calculated by taking the current market value of its total assets, subtracting any liabilities, and then dividing that total by the total number of outstanding Shares. The Trust Agreement gives the Sponsor the exclusive authority to determine the Trust’s NAV and the Trust’s NAV per Share, which it has delegated to the Administrator. |
| F. | Federal Income Taxes |
|---|---|
| The Trust is treated as a grantor trust for federal income tax purposes and, therefore, no provision for federal income taxes is required. Any interest, expenses, gains and losses are passed through to the holders of Shares of the Trust. The Sponsor has reviewed the tax positions for the period presented and has determined that no provision for income tax is required in the Trust’s financial statements. | |
| G. | Segment Reporting |
| The Sponsor acts as the Trust’s chief operating decision maker (“CODM”), assessing performance and making decisions about resource allocation. The CODM has determined that the Trust has a single operating segment based on the fact that the Trust’s long-term strategic asset allocation is pre-determined in accordance with the terms of its prospectus, with a defined investment strategy which is executed by the Sponsor. | |
| H. | Interim financial statements |
| The financial statements included herein were prepared without audit according to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP may be omitted pursuant to such rules and regulations. The financial statements reflect, in the opinion of management, all adjustments necessary that were of a normal and recurring nature and adequate disclosures to present fairly the financial position and results of operations as of and for the periods indicated. The results of operations for the three months ended March 31, 2025 and 2024, are not necessarily indicative of the results to be expected for the full year or for any other period. | |
| These financial statements should be read in conjunction with the audited financial statements and the notes thereto included in the Form 10-K previously filed with the SEC. |
Note 3. Trust Expenses and Other Agreements
The Trust pays the Sponsor a unified fee (the “Sponsor Fee”) of 0.20% of net assets that accrues daily and pays monthly. Effective for the period from July 23, 2024 through July 22, 2025, the Sponsor has agreed to waive the entire Sponsor Fee for the first $1.5 billion of the Trust’s net assets. If the Trust’s net assets exceed $1.5 billion prior to July 22, 2025, the Sponsor Fee charged on net assets over $1.5 billion will be 0.20% of average daily net assets. All investors will incur the same Sponsor Fee which is the weighted average of those fee rates. After July 22, 2025, the Sponsor Fee will be 0.20% of average daily net assets. The Sponsor has agreed to pay all operating expenses (except for litigation expenses and other extraordinary expenses) from the Sponsor Fee. The Sponsor from time to time will sell ETH, which may be facilitated by one or more liquidity providers and/or the ETH Custodians, in such quantity as is necessary to permit payment of the Sponsor Fee and Trust expenses and liabilities not assumed by the Sponsor.
The Trustee fee is paid by the Sponsor and is not an expense of the Trust.
The Trust holds its ETH at the ETH Custodian and at the Additional ETH Custodian, both of which are regulated third-party custodians that carry insurance (in the case of the Additional ETH Custodian, such insurance is carried by its parent, Coinbase Inc., and is intended to cover the loss of client assets held by Coinbase Inc. and its subsidiaries, including the Additional ETH Custodian) and are responsible for safekeeping of ETH owned by the Trust and holding private keys that provide access to the ETH in the Trust’s ETH account.
State Street Bank and Trust Company serves as the Trust’s administrator, transfer agent and cash custodian.
Note 4. Related Parties
The Sponsor is considered to be a related party to the Trust.
MarketVector Indexes GmbH is the index sponsor and index administrator for the MarketVector Ethereum Benchmark Rate, which is used by the Trust to determine its NAV. MarketVector Indexes GmbH is an indirectly wholly-owned subsidiary of VanEck.
Van Eck Securities Corporation, a marketing agent to the Trust, is a wholly-owned subsidiary of VanEck.
VanEck was the initial seed investor (“Seed Capital Investor”) on May 20, 2024. On June 25, 2024, the 2,000 Shares held by the Seed Capital Investor were redeemed for cash and the Seed Capital Investor purchased the “Seed Creation Baskets,” comprising of 200,000 Shares at a per-Share price of $50.00. Total proceeds to the Trust from the sale of the Seed Creation Baskets were $10,000,000 which resulted in the Trust receiving 2,929.06 ETH. As of December 31, 2024 and March 31, 2025, the Seed Capital Investor’s ownership in the Trust represents approximately 13% of net assets.
VanEck is a minority interest holder in the parent company of the ETH Custodian, representing less than 1% of its equity.
Note 5. Capital Share Transactions
Investors can buy and sell Shares of the Trust in secondary market transactions through brokers. Shares trade on the Exchange under the ticker symbol ETHV. Shares are bought and sold throughout the trading day like other publicly traded securities.
The Trust continuously offers the Trust Shares in baskets consisting of 25,000 Shares to authorized participants. Authorized participants pay a transaction fee for each order they place to create or redeem one or more baskets. The Administrator calculates the cost to purchase (or sell in the case of a redemption order) the amount of ETH represented by the baskets being created (or redeemed); the amount of ETH represented is equal to the combined NAV of the number of Shares included in the baskets being created (or redeemed).
The Trust creates and redeems Shares, but only in one or more baskets. Baskets are only made in exchange for delivery to the Trust or the distribution by the Trust of the amount of ETH represented by the baskets being created or redeemed, the amount of which is equal to the combined NAV of the number of Shares included in the baskets being created or redeemed determined as of 4:00 p.m. EST on the day the order to create or redeem baskets is properly received. For an order to create baskets, an authorized participant will deliver cash to the Trust’s account at the cash custodian, which the Sponsor will then use to purchase ETH from a liquidity provider chosen by the Sponsor. For an order to redeem baskets, the Sponsor will arrange for the ETH represented by the basket to be sold to a liquidity provider chosen by the Sponsor and the cash proceeds distributed from the Trust’s account at the cash custodian to the authorized participant in exchange for their Shares. Only authorized participants may place orders to create and redeem baskets through the transfer agent. The transfer agent will coordinate with the Trust’s ETH Custodians to facilitate settlement of the Shares and ETH.
Share and capital activity is as follows:
| Three Months Ended March 31, 2025(a) | ||
|---|---|---|
| Shares | Amount | |
| Beginning of period | 3,000,000 | $137,801,504 |
| Shares issued | 225,000 | 9,957,156 |
| Shares redeemed | (75,000) | (2,207,029) |
| End of period | 3,150,000 | $145,551,631 |
| (a) | No comparative share activity have been provided as the Trust did not have any operations as of March 31, 2024. |
Note 6. Commitments and Contingent Liabilities
In the normal course of business, the Trust enters into contracts that contain a variety of general indemnifications. The Trust’s maximum exposure under these agreements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. However, the Sponsor believes the risk of loss under these arrangements to be remote.
Note 7. Concentration Risk
Substantially all of the Trust’s assets are holdings of ETH, which creates a concentration risk associated with fluctuations in the value of ETH due to a number of factors. Accordingly, a decline in the value of ETH will have an adverse effect on the value of the Shares of the Trust. Factors that may have the effect of causing a decline in the value of ETH include high volatility, which could have a negative impact on the performance of the Trust. ETH platforms are relatively new and may be unregulated or may be subject to regulation in a relevant jurisdiction, but may not be complying, and therefore, may be more exposed to fraud and security breaches than established, regulated exchanges for other financial assets or instruments, which could have a negative impact on the performance of the Trust. The value of the Shares depends on the development and acceptance of the ethereum network. The slowing or stopping of the development or acceptance of the ethereum network may adversely affect an investment in the Trust. The price of ETH on the ETH market has exhibited periods of extreme volatility. Digital assets such as ETH were only introduced within the past decade, and the medium-to-long term value of the Shares is subject to a number of factors relating to the capabilities and development of block-chain technologies and to the fundamental investment characteristics of digital assets that are uncertain and difficult to evaluate. The Trust is subject to risks due to its concentration of investments in a single asset class. Possible illiquid markets may exacerbate losses or increase the variability between the Trust’s NAV and its market price. The amount of ETH represented by the Shares may decline over time. ETH with a fair value of $146,428,902 and $84,668,819 were held by the ETH Custodians at December 31, 2024 and March 31, 2025, respectively.
Future and current regulations by a United States or foreign government or quasi-governmental agency could have an adverse effect on an investment in the Trust. Shareholders do not have the protections associated with ownership of Shares in an investment company registered under the 1940 Act or the protections afforded by the Commodity Exchange Act. Future legal or regulatory developments may negatively affect the value of ETH or require the Trust or the Sponsor to become registered with the SEC or CFTC, which may cause the Trust to liquidate.
The Exchange on which the Shares are listed may halt trading in the Trust’s Shares, which would adversely impact a Shareholder’s ability to sell Shares. The market infrastructure of the ETH spot market could result in the absence of active authorized participants able to support the trading activity of the Trust.
Shareholders that are not authorized participants may only purchase or sell their Shares in secondary trading markets, and the conditions associated with trading in secondary markets may adversely affect Shareholders’ investment in the Shares.
Note 8. Financial Highlights(a)
The financial highlights summarize certain per share operating information and financial ratios of net investment income (loss) and expenses, to daily average net assets for the three months ended March 31, 2025. An individual investor’s return and ratios may vary based on the timing of capital transactions:
| Net asset value per share, beginning of period | $48.81 |
|---|---|
| From investment operations: | |
| Net investment loss(b) | — |
| Net realized gain (loss) and change in unrealized appreciation/depreciation from investments in ether(c) | (21.93) |
| Net decrease resulting from operations | (21.93) |
| Net asset value per share, end of period(d) | $26.88 |
| Total return (%)(e) | (44.93)% |
| Ratios to average net assets(f) | |
| Expenses before fee waiver | 0.20% |
| Expenses after fee waiver | 0.00% |
| Net investment loss | 0.00% |
| Portfolio turnover rate(e) | 1.82% |
| (a) | No prior year comparative financial statements have been provided as the Trust did not have any operations as of March 31, 2024. |
|---|---|
| (b) | Net investment income (loss) per share has been calculated based upon an average of daily shares outstanding. |
| (c) | The amount shown for a share outstanding throughout the year may not agree with the change in the aggregate gains and losses for the year because of the timing of sales and repurchases of the Trust’s shares in relation to fluctuating market values for the Trust. |
| (d) | Returns are not annualized and include adjustments required by GAAP. Returns for financial statements purposes may differ from net asset values and performance reported elsewhere by the Trust. |
| (e) | Non-annualized. |
| (f) | Annualized. |
Note 9. Subsequent Event Review
The Trust has evaluated subsequent events and transactions for potential recognition or disclosure through the date the financial statements were issued and has determined that there are no material events that would require disclosure.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.