Bitwise Ethereum ETF

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read together with, and is qualified in its entirety by reference to, our unaudited financial statements and related notes included elsewhere in this Quarterly Report, which have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The following discussion may contain forward-looking statements based on assumptions we believe to be reasonable. Our actual results could differ materially from those discussed in these forward-looking statements.

Current wording

The following discussion and analysis of the Trust's financial condition and results of operations should be read together with, and is qualified in its entirety by reference to, the Trust's unaudited financial statements and related notes included elsewhere in this Quarterly Report, which have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The following discussion may contain forward-looking statements based on assumptions the Trust believes to be reasonable. The Trust's actual results could differ materially from those discussed in these forward-looking statements. See “Statement Regarding Forward-Looking Statements” above.

Previous wording

The following charts show the percentage of Premium/(Discount) of the Shares as quoted on the Exchange and the Trust’s NAV and a comparison of the NAV of the Trust vs. the market price as quoted on the Exchange.

Current wording

The following charts show the percentage of Premium/(Discount) of the Shares as quoted on the Exchange and the Trust’s NAV and a comparison of the NAV of the Trust vs. the market price as quoted on the Exchange for the period from July 2024 to March 2025.

Previous wording

From July 23, 2024 to September 30, 2024, the Shares of the Trust traded at an average discount, based on closing prices at 4:00 p.m. ET, and estimated, unaudited, NAV per-share of 0.01%. During that same period, the highest premium was 0.58% on August 5, 2024, and the lowest premium was 0.001% on August 19, 2024. During that same period, the highest discount was 0.59% on July 24, 2024, and the lowest discount was 0.06% on September 20, 2024.

Current wording

From July 23, 2024 to March 31, 2025, the Shares of the Trust traded at an average discount, based on closing prices at 4:00 p.m. ET, and an estimated, unaudited, NAV per-share of 0.001%. During that same period, the highest premium was 1.65% on January 13, 2025, and the lowest premium was 0.001% on August 19, 2024. During that same period, the highest discount was 1.34% on March 4, 2025, and the lowest discount was 0.01% on February 18, 2025.

Previous wording

As of September 30, 2024*, the Trust held a net closing balance of 100,152.9571 ether with a total market value of $259,503,322 based on the Pricing Index price of $2,591.07, used to determine the Trust's NAV. The total market value of the Trust's ether held was $259,850,853 based on the price of ether (Lukka Prime Rate) in the principal market (Crypto.com) of $2,594.54, used to determine the Trust's Principal Market NAV.

Current wording

As of March 31, 2025*, the Trust held a net closing balance of 95,108.4265 ether with a total market value of $174,674,234 based on the Pricing Index price of $1,836.58, used to determine the Trust's NAV. The total market value of the Trust's ether held was $173,794,481 based on the price of an ether (Lukka Prime Rate) in the principal market (Crypto.com) of $1,827.33, used to determine the Trust's Principal Market NAV.

Previous wording

Net realized and unrealized loss on investment in ether for the period from July 22, 2024 to September 30, 2024 was approximately $69,387 which includes a realized loss of $1,116 on the sale of ether for redemptions and net change in unrealized depreciation on investment in ether of approximately $68,271. Net realized and unrealized loss on investment in ether for the period was driven by ether price depreciation from $3,484.67 per ether as of July 22, 2024 to $2,591.07 per ether as of September 30, 2024. Net decrease in net assets resulting from operations was approximately $69,387 for the period from July 22, 2024 to September 30, 2024, which primarily consisted of the net realized and unrealized loss on investment in ether. Net assets increased to approximately $259,851 on September 30, 2024, while NAV per-share decreased approximately 25.56% for the period. The change in net assets resulted from the net capital share transactions of approximately $329,238, offset by a net decrease resulting from operations of $69,387.

Current wording

Net realized and unrealized loss on investment in ether for the three months ended March 31, 2025 was approximately $149,835, which includes a net realized gain of $2 on the sale of ether to pay the Sponsor Fee, net realized loss on investment in ether sold for redemptions of $13,641 and net change in unrealized depreciation on investment in ether of approximately $136,196. Net realized and unrealized loss on investment in ether for the period was driven by ether price depreciation from $3,340.40 per ether as of December 31, 2024 to $1,827.33 per ether as of March 31, 2025. Net decrease in net assets resulting from operations was approximately $149,928 for the three months ended March 31, 2025, which primarily consisted of the net realized and unrealized loss on investment in ether of approximately 149,835, plus the Sponsor Fee of $93. Net assets decreased to approximately $173,762 at March 31, 2025 and the NAV per-share decreased approximately 45.33% for the three months ended March 31, 2025. The decrease in net assets primarily resulted from the aforementioned ether price depreciation, the net decrease in capital share transactions of approximately $80,839, and a net decrease resulting from operations of $149,928.

Previous wording

Sponsor Fee, the Sponsor has agreed to assume and pay the normal operating expenses of the Trust, which include the Trustee’s monthly fee and out-of-pocket expenses, the fees of the Trust’s regular service providers (Cash Custodian, Ether Custodian, Prime Execution Agent, Marketing Agent, Transfer Agent and Administrator), exchange listing fees, tax reporting fees, SEC registration fees, printing and mailing costs, audit fees and up to $500,000 per annum in ordinary legal fees and expenses. The Sponsor may determine in its sole discretion to assume legal fees and expenses of the Trust in excess of $500,000 per annum. The Sponsor also agreed to pay the costs of the Trust’s organization.

Current wording

The Trust agreed to pay the unitary Sponsor Fee of 0.20% per annum of the Trust’s ether holdings. The Sponsor contractually waived the Sponsor Fee on the first $500 million of Trust assets through January 22, 2025, and has been accruing at an annual rate of 0.20% of the Trust’s net assets since then. As a result, the only ordinary expense of the Trust is expected to be the Sponsor Fee. In exchange for the Sponsor Fee, the Sponsor has agreed to assume and pay the normal operating expenses of the Trust, which include the Trustee’s monthly fee and out-of-pocket expenses, the fees of the Trust’s regular service providers (Cash Custodian, Ether Custodian, Prime Execution Agent, Marketing Agent, Transfer Agent and Administrator), exchange listing fees, tax reporting fees, SEC registration fees, printing and mailing costs, audit fees and up to $500,000 per annum in ordinary legal fees and expenses. The Sponsor may determine in its sole discretion to assume legal fees and expenses of the Trust in excess of $500,000 per annum. The Sponsor also agreed to pay the costs of the Trust’s organization.

Previous wording

The Trust does not hold a cash balance except in connection with the creation and redemption of Baskets (blocks of 10,000 Shares) or to pay expenses not assumed by the Sponsor. To pay for expenses not assumed by the Sponsor that are denominated in U.S. dollars, the Sponsor, on behalf of the Trust, may sell the Trust’s ether as necessary to pay such expenses. The cash proceeds of the sale will be sent to the Sponsor to pay the expenses. Any remaining cash will be distributed back to the Cash Custodian. The Sponsor expects that the Trust will have an immaterial amount of cash flow from its operations and that its cash balance will be insignificant at the end of each reporting period. The Trust’s only sources of cash are proceeds from the sale of Baskets and ether. The Trust will not borrow to meet liquidity needs.

Current wording

The Trust does not hold a cash balance except in connection with the creation and redemption of Baskets (blocks of 10,000 Shares) or to pay expenses not assumed by the Sponsor. To pay for expenses not assumed by the Sponsor that are denominated in U.S. dollars, the Sponsor, on behalf of the Trust, may sell the Trust’s ether as necessary to pay such expenses. The cash proceeds of the sale are sent to the Sponsor to pay the expenses. Any remaining cash is distributed back to the Cash Custodian. The Sponsor expects that the Trust will have an immaterial amount of cash flow from its operations and that its cash balance will be insignificant at the end of each reporting period. The Trust’s only sources of cash are proceeds from the sale of Baskets and ether. The Trust will not borrow to meet liquidity needs.

Previous wording

The Trust is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to its liquidity needs.

Current wording

The Trust is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to its liquidity needs. While broader economic and market conditions, including evolving trade policies and tariffs, could impact the price of ether and contribute to increased market volatility, the Trust does not currently anticipate these factors will materially affect its liquidity needs.

Previous wording

As of September 30, 2024, the Trust has not used, nor does it expect to use in the future, special purpose entities to facilitate off-balance sheet financing arrangements and have no loan guarantee arrangements or off-balance sheet arrangements of any kind other than agreements entered into in the normal course of business, which may include indemnification provisions related to certain risks service providers undertake in performing services which are in the best interests of the Trust. While the Trust’s exposure under such indemnification provisions cannot be estimated, these general business indemnifications are not expected to have a material impact on a Trust’s financial position.

Current wording

As of March 31, 2025, the Trust has not used, nor does it expect to use in the future, special purpose entities to facilitate off-balance sheet financing arrangements and have no loan guarantee arrangements or off-balance sheet arrangements of any kind other than agreements entered into in the normal course of business, which may include indemnification provisions related to certain risks service providers undertake in performing services which are in the best interests of the Trust. While the Trust’s exposure under such indemnification provisions cannot be estimated, these general business indemnifications are not expected to have a material impact on the Trust’s financial position.

Previous wording

No material changes have occurred during the period from July 22, 2024 (commencement of operations) to September 30, 2024.

Current wording

No material changes have occurred during the three months ended March 31, 2025.