Grayscale Ethereum Trust 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. Factors that could cause or contribute to these differences include, but are not limited to, those set forth under “Part II, Item 1A. Risk Factors” in this Quarterly Report, or in “Part I, Item 1A. Risk Factors” and “Forward-Looking Statements” or other sections of our Annual Report on Form 10-K.

Current 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. Factors that could cause or contribute to these differences include, but are not limited to, those set forth under “Part II, Item 1A. Risk Factors” in this Quarterly Report or in “Part I, Item 1A. Risk Factors” and “Forward-Looking Statements” or other sections of our Annual Report.

Previous wording

On January 1, 2025, GSI consummated an internal corporate reorganization (the “Reorganization”), pursuant to which GSI, the Sponsor of the Trust prior to the Reorganization, merged with and into 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.

Current wording

On January 1, 2025, GSI consummated an internal corporate reorganization (the “Reorganization”), pursuant to which GSI, the Sponsor of the Trust prior to the Reorganization, merged with and into 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 has not had any material impact on the operations of the Trust.

Previous wording

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.

Current wording

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 became the sole remaining Sponsor of the Trust.

Previous wording

Financial Highlights for the Three Months Ended March 31, 2025 and 2024

Current wording

Financial Highlights for the Three and Six Months Ended June 30, 2025 and 2024

Previous wording

Net realized and unrealized loss on investment in Ether for the three months ended March 31, 2025 was ($1,965,068), which includes a realized gain of $18,140 on the transfer of Ether to pay the Sponsor’s Fee, a realized gain of $504,379 on the sale of Ether to meet redemptions, and net change in unrealized appreciation on investment in Ether of ($2,487,587). 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 ($1,986,868) for the three months ended March 31, 2025, which consisted of the net realized and unrealized loss on investment in Ether, plus the Sponsor’s Fee of $21,800. Net assets decreased to $2,223,557 at March 31, 2025, a 53% decrease for the three-month period. The decrease in net assets resulted from the aforementioned Ether price depreciation, the withdrawal of approximately 8,071 Ether to pay the foregoing Sponsor’s Fee, and the redemption of approximately 226,051 Ether, with a value of $605,818 from the Trust, partially offset by the contribution of approximately 33,168 Ether, with a value of $80,263 to the Trust in connection with Share creations during the period.

Current wording

Net realized and unrealized loss on investment in Ether for the six months ended June 30, 2025 was ($1,195,026), which includes a realized gain of $30,214 on the transfer of Ether to pay the Sponsor’s Fee, a realized gain of $657,896 on the sale of Ether to meet redemptions, and net change in unrealized appreciation on investment in Ether of ($1,883,136). 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 $2,516.23 per Ether as of June 30, 2025. Net decrease in net assets resulting from operations was ($1,232,472) for the six months ended June 30, 2025, which consisted of the net realized and unrealized loss on investment in Ether, plus the Sponsor’s Fee of $37,446. Net assets decreased to $2,836,933 at June 30, 2025, a 40% decrease for the six-month period. The decrease in net assets resulted from the aforementioned Ether price depreciation, the withdrawal of approximately 15,230 Ether to pay the foregoing Sponsor’s Fee, and the redemption of approximately 333,499 Ether with a value of $811,599 from the Trust, partially offset by the contribution of approximately 58,395 Ether with a value of $145,024 to the Trust in connection with Share creations during the period.

Previous wording

Net realized and unrealized gain on investment in Ether for the three months ended March 31, 2024 was $4,006,549, which includes a realized gain of $45,780 on the transfer of Ether to pay the Sponsor’s Fee and net change in unrealized appreciation on investment in Ether of $3,960,769. Net realized and unrealized gain on investment in Ether for the period was driven by Ether price appreciation from $2,281.10 per Ether as of December 31, 2023, to $3,637.95 per Ether as of March 31, 2024. Net increase in net assets resulting from operations was $3,953,056 for the three months ended March 31, 2024, which consisted of the net realized and unrealized gain on investment in Ether, less the Sponsor’s Fee of $53,493. Net assets increased to $10,711,110 at March 31, 2024, a 58% increase for the three-month period. The increase in net assets resulted from the aforementioned Ether price appreciation, partially offset by the withdrawal of approximately 18,359 Ether to pay the foregoing Sponsor’s Fee.

Current wording

Net realized and unrealized gain on investment in Ether for the six months ended June 30, 2024 was $3,372,665, which includes a realized gain of $99,554 on the transfer of Ether to pay the Sponsor’s Fee and net change in unrealized appreciation on investment in Ether of $3,273,111. Net realized and unrealized gain on investment in Ether for the period was driven by Ether price appreciation from $2,281.10 per Ether as of December 31, 2023, to $3,423.00 per Ether as of June 30, 2024. Net increase in net assets resulting from operations was $3,257,732 for the six months ended June 30, 2024, which consisted of the net realized and unrealized gain on investment in Ether, less the Sponsor’s Fee of $114,933. Net assets increased to $10,015,786 at June 30, 2024, a 48% increase for the six-month period. The increase in net assets resulted from the aforementioned Ether price appreciation, partially offset by the withdrawal of approximately 36,604 Ether to pay the foregoing Sponsor’s Fee.

Previous wording

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 Trust’s NAV per Share is calculated using a non-GAAP methodology where the price is derived from multiple Digital Asset Trading Platforms. 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. See “Item 1. Business—Overview of the Ethereum Industry and Market—Ether Value—The Index and the Index Price” in our Annual Report for a description of the Index and the Index Price. The Digital Asset Trading Platforms included in the Index as of March 31, 2025 were Coinbase, Kraken, Bullish and Crypto.com. On March 23, 2025, the Index Provider removed LMAX Digital from the Index due to the trading platform not meeting the Index Provider’s minimum liquidity requirement, and added Bullish to the Index, as part of its scheduled quarterly review. The Digital Asset Trading Platforms included in the Index as of March 31, 2024 were Coinbase, Kraken, LMAX Digital and Crypto.com. See “Item 1. Business—Valuation of Ether and Determination of NAV” in our Annual Report for a description of the Trust’s NAV per Share.

Current wording

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 Trust’s NAV per Share is calculated using a non-GAAP methodology where the price is derived from multiple Digital Asset Trading Platforms. 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. See “Item 1. Business—Overview of the Ethereum Industry and Market—Ether Value—The Index and the Index Price” in our Annual Report for a description of the Index and the Index Price. On June 22, 2025, the Index Provider added LMAX Digital to the Index due to the trading platform meeting the Index Provider’s minimum liquidity requirement, and did not remove any Constituent Trading Platforms as part of its scheduled quarterly review. The Digital Asset Trading Platforms included in the Index (the “Constituent Trading Platforms”) as of June 30, 2025 were Coinbase, Kraken, Bullish, Crypto.com, and LMAX Digital. The Digital Asset Trading Platforms included in the Index as of June 30, 2024 were Coinbase, Kraken, LMAX Digital and Crypto.com. See “Item 1. Business—Valuation of Ether and Determination of NAV” in our Annual Report for a description of the Trust’s NAV per Share.

Previous wording

As of March 31, 2025, the Trust had a net closing balance of 1,216,833.82486927 Ether with a value of $2,222,437,466, based on the Index Price of $1,826.41 on March 31, 2025 (non-GAAP methodology). As of March 31, 2025, the total market value of the Trust’s Ether was $2,223,556,954, based on the price of one Ether in the principal market (Crypto.com) of $1,827.33 on March 31, 2025.

Current wording

As of June 30, 2025, the Trust had a net closing balance of 1,127,453.59294447 Ether with a value of $2,838,995,794 based on the Index Price of $2,518.06 on June 30, 2025 (non-GAAP methodology). As of June 30, 2025, the total market value of the Trust’s Ether was $2,836,932,554 based on the price of one Ether in the principal market (Crypto.com) of $2,516.23 on June 30, 2025.

Previous wording

As of March 31, 2024, the Trust had a net closing balance of 2,944,270.73954244 Ether with a value of $10,710,962,523, based on the Index Price of $3,637.90 on March 31, 2024 (non-GAAP methodology). As of March 31, 2024, the total market value of the Trust’s Ether was $10,711,109,737, based on the price of one Ether in the principal market (Coinbase) of $3,637.95 on March 31, 2024.

Current wording

As of June 30, 2024, the Trust had a net closing balance of 2,926,025.74278639 Ether with a value of $10,016,283,542, based on the Index Price of $3,423.17 on June 30, 2024 (non-GAAP methodology). As of June 30, 2024, the total market value of the Trust’s Ether was $10,015,786,118, based on the price of one Ether in the principal market (Coinbase) of $3,423.00 on June 30, 2024.

Previous wording

The following table illustrates the movements in the Index Price from April 1, 2020 to March 31, 2025. During such period, the Index Price has ranged from $130.15 to $4,776.32, with the straight average being $2,104.66 through March 31, 2025. The Sponsor has not observed a material difference between the Index Price and average prices from the Constituent Trading Platforms included in the Index as of March 31, 2025 individually or as a group.

Current wording

The following table illustrates the movements in the Index Price from July 1, 2020 to June 30, 2025. During such period, the Index Price has ranged from $225.27 to $4,776.32, with the straight average being $2,203.72 through June 30, 2025. The Sponsor has not observed a material difference between the Index Price and average prices from the Constituent Trading Platforms as of June 30, 2025, individually or as a group.

Previous wording

The following table illustrates the movements in the Digital Asset Market price of Ether, as reported on the Trust’s principal market, from April 1, 2020 to March 31, 2025. During such period, the price of Ether has ranged from $130.22 to $4,776.95, with the straight average being $2,104.69 through March 31, 2025.

Current wording

The following table illustrates the movements in the Digital Asset Market price of Ether, as reported on the Trust’s principal market, from July 1, 2020 to June 30, 2025. During such period, the price of Ether has ranged from $225.27 to $4,776.95, with the straight average being $2,203.74 through June 30, 2025.