ETHE 10-K & 10-Q changes, risk factors and insider trading

The trading prices of many digital assets, including Ether, have experienced extreme volatility in recent periods and may continue to do so. Extreme volatility in the future, including declines in the trading prices of Ether, could have a material adverse effect on the value of the Shares and the Shares could lose all or substantially all of their value.

The trading prices of many digital assets, including Ether, have experienced extreme volatility throughout their existence, including in recent periodsexistence and may continue to do so. For instance, following significant increases throughout the majority of 2020, digital asset prices, including Ether, experienced significant volatility throughout 2021 and 2022. This volatility became extreme in November 2022,2022 when FTX, then a major Digital AssetFTX Trading Platform,Ltd. (“FTX”), halted customer withdrawals. Additionally, on October 10, 2025, it was reported that a sharp decline in digital asset market prices triggered the liquidation of approximately $20 billion in leveraged positions across the digital asset industry. Any similar halting of withdrawals or liquidations across leveraged positions in the digital asset industry in the future could further impact trading prices. See “—Recent developments in the digital asset economy have led to extreme volatility and disruption in digital asset markets, a loss of confidence in participants of the digital asset ecosystem, significant negative publicity surrounding digital assets broadly and market-wide declines in liquidity.” Digital asset prices, including Ether, have continued to fluctuate widely through the date of this Annual Report.

Digital assets such as Ether were only introduced within the past two decades, and the medium-to-long term value of the Shares is subject to a number of factors relating to the capabilities and development of blockchain technologies, such as the recentnessrecency of their development, their dependence on the internet and other technologies, their dependence on the role played by users, developers and validators and the potential for malicious activity. For example, the realization of one or more of the following risks could materially adversely affect the value of the Shares:

The open-source structure of many digital asset network protocols, such as the protocol for the Ethereum Network, means that developers and other contributors are generally not directly compensated for their contributions in maintaining and developing such protocols. As a result, the developers and other contributors of a particular digital asset may lack a financial incentive to maintain or develop the network or may lack the resources to adequately address emerging issues. Alternatively, some developers may be funded by companies whose interests are at odds with other participants in a particular digital asset network. A failure to properly monitor and upgrade the protocol of the Ethereum Network could damage that network.

Moreover, in the past, flaws in the source code for digital asset networks and related protocols have been exposed and exploited, including flaws that disabled some functionality for users, exposed users’ personal information and/or resulted in the theft of users’ digital assets. The cryptography underlying Etherthe Ethereum Network could prove to be flawed or ineffective, or developments in mathematics and/or technology, including advances in digital computing, algebraic geometry and quantum computing, could result in such cryptography becoming ineffective. Quantum computing technology is an emerging phenomenon which, because it is still developing, makes it difficult to predict its ultimate effect on the future value of Ether and other digital assets. However, if quantum computing technology is able to advance and significantly increase its capacity relative to the capacity of today’s leading quantum computers, it could potentially undermine the viability of many of the cryptographic algorithms used across the world’s information technology infrastructure, including the cryptographic algorithms used for digital assets like Ether. If quantum computing is able to advance in that way, there is a risk that quantum computing could materially reduce the security assumptions underlying the Ethereum Network and result in the cryptography underlying the Ethereum Network becoming ineffective. If such is realized, it could compromise the security of the Ethereum Network or allow a malicious actor to compromise the wallets holding Ether owned by the Trust or others on the Ethereum Network, which would result in losses to shareholders. For example, if sufficiently powerful quantum computers are developed, they could use known quantum algorithms to derive private keys from publicly available public keys, potentially allowing malicious actors to forge transaction signatures and misappropriate Ether. There is no guarantee that new quantum-proof architectures will be built and appropriate transitions will be implemented across the network at scale in a timely manner; any such changes could require the achievement of broad consensus within the Ethereum Network community and may result in a fork (or multiple forks), and there can be no assurance that such consensus would be achieved or the changes implemented successfully. In such a scenario, the Ethereum Network may not be able to transition to quantum-resistant cryptography in a timely or effective manner. In any of these circumstances, a malicious actor may be able to take the Trust’s Ether, which would adversely affect the value of the Shares. Moreover, functionality of the Ethereum Network may be negatively affected by such an exploit such that it is no longer attractive to users, thereby dampening demand for Ether. Even if another digital asset other than Ether were affected by similar circumstances, any reduction in confidence in the source code or cryptography underlying digital asset networks and related protocols generally could negatively affect the demand for digital assets and therefore adversely affect the value of the Shares.

The Ethereum Network is in the process of implementing a series of software upgrades and other changes to its protocol, which were previously referred to collectively as Ethereum 2.0 and some of which were implemented during 2022, such as the Merge. These upgrades will result in new iterations of the Ethereum Network. Many of the contemplated upgrades the Ethereum Network will include updates to material aspects of its source code. Although some of these upgrades have been successfully implemented, such as the Merge, previously successful upgrades do not guarantee that future upgrades will be successful, and any failure to properly implement future changes could have a material adverse effect on the value of Ether and the value of the Shares. In March 2024, the Ethereum Network completed a network upgrade called Dencun, which enabled “proto-danksharding.” The purpose of proto-danksharding is to increase scalability of the Ethereum Network by allowing easy synchronization with Layer 2 networks capable of processing many more transactions than the Layer 1 blockchain alone. The intended effect would be to increase the rate of transactions that can be processed by the Ethereum Network. As a result, it is possible that the amount of Ether required to sync Layer 2 networks with the Blockchain would be reduced and therefore the demand for Ether could be reduced, which could have a material adverse effect on the value of Ether and the value of the Shares. See “Item 1. Business—Overview of the Ethereum Industry and Market—Modifications to the Ethereum Protocol” for additional information. In addition, the acceptance of software patches or upgrades by a significant, but not overwhelming, percentage of the users and validators in a digital asset network could result in a “fork” in such network’s blockchain, resulting in the operation of multiple separate networks. See “—A temporary or permanent “fork” or a “clone” could adversely affect the value of the Shares” for additional information.

The Ethereum Network is still in the process of developing and making significant decisions that will affect policies that govern the supply and issuance of Ether as well as other Ethereum Network protocols. For example, the Ethereum Network has on three separate occasions reduced the quantity of Ether rewarded per block prior to its transition to a proof-of-stake consensus mechanism, which itself fundamentally altered the structure of block rewards, and may make additional changes in the future, see “Item 1. Business—Overview of the Ethereum Industry and Market—Creation of New Ether” for additional information. If the Ethereum Network does not successfully develop its policies on supply and issuance, or does so in a manner that is not attractive to network participants, there may not be sufficient network level support for such network, which could lead to a decline in the support and price of Ether.

Digital assets represent a relatively new and rapidly evolving industry, and the value of the Shares depends on the acceptance of Ether.

The first digital asset, Bitcoin, was launched in 2009. Ether was launched in 2015 and, along with Bitcoin, was one of the first cryptographic digital assets to gain global adoption and critical mass. In general, digital asset networks, including the Ethereum Network and related protocols represent a relatively new and rapidly evolving industry that is subject to a variety of factors that are difficult to evaluate. For example, the realization of one or more of the following risks could materially adversely affect the value of the Shares:

As of December 31, 2024,2025, the Ethereum Network handled approximately 1425 transactions per second. In an effort to increase the volume of transactions that can be processed on a given digital asset network, many digital assetsasset networks are being upgraded with various features to increase the speed and throughput of digital asset transactions. For example, in March 2024, the Ethereum Network completed a network upgrade called Dencun, which enabled “proto-danksharding.” See “Item 1. Business—Overview of the Ethereum Industry and Market—Creation of New Ether” and “—Modifications to the Ethereum Protocol” for additional information.

As corresponding increases in throughput lag behind growth in the use of digital asset networks, average transaction fees and settlement times may increase considerably. For example, the Ethereum Network has been, at times, at capacity, which has led to increased transaction fees. Since January 1, 2022,2023, Ether average daily transaction fees have ranged from $0.56$0.13 per transaction, on AugustDecember 31,27, 2024,2025, to as high as $200.27$29.46 per transaction, on MayMarch 1,5, 2022.2024. As of December 31, 2024,2025, Ether average daily transaction fees stood at $3.52$0.15 per transaction. Increased transaction fees and decreased settlement speeds could preclude certain uses for Ether (e.g., micropayments), and could reduce demand for, and the price of, Ether, which could adversely impact the value of the Shares.

As of December 31, 2024,2025, the largest 100 Ether wallets held approximately 21.9%18.8% of the Ether in circulation. Moreover, it is possible that other persons or entities control multiple wallets that collectively hold a significant amount of Ether, even if they individually only hold a small amount, and it is possible that some of these wallets are controlled by the same person or entity. Further, holders with substantial Ether positions may directly or indirectly exert influence over other ecosystem participants such as validators, developers, or major wallet and infrastructure providers. For example, these large holders may signal large potential sales or otherwise affect the stability of the market price of Ether, which could influence protocol development, governance dynamics, or market conditions. As a result of this concentration of ownership, large sales or distributions by such holders could have an adverse effect on the market price of Ether.

If the digital asset awardreward or transaction fees for recording transactions on the Ethereum Network are not sufficiently high to incentivize validators, or if certain jurisdictions continue to limit or otherwise regulate validating activities, validators may cease expanding validating power or demand high transaction fees, which could negatively impact the value of Ether and the value of the Shares.

In 2021, the Ethereum Network implemented the EIP-1559 upgrade. EIP-1559 changed the methodology used to calculate transaction fees paid to Ether validators (then called “miners”) in such a manner that reduced the total net issuance of Ether fees paid to miners.Ether. If the digital asset awards for validating blocks or the transaction fees for recording transactions on the Ethereum Network are not sufficiently high to incentivize validators, or if certain jurisdictions continue to limit or otherwise regulate validating activities, validators may cease expending validating power to validate blocks and confirmations of transactions on the Blockchain could be slowed. For example, the realization of one or more of the following risks could materially adversely affect the value of the Shares:

Although there are no known reports of malicious control of the Ethereum Network, if groups of coordinating or connected Ether holders that together have more than 33% of outstandingstaked Ether were to stake that Ether and run validators,Ether, they could exert authority over the validation of Ether transactions. This risk is heightened if a substantial amount of the validating power on the network falls within the jurisdiction of a single governmental authority and is significantly heightened if over 66% falls within such a jurisdiction. If network participants, including the core developers and the administrators of validating pools, do not act to ensure greater decentralization of Ethereum Network validators, the feasibility of a malicious actor obtaining control of the validating power on the Ethereum Network will increase, which may adversely affect the value of the Shares.

A malicious actor may also obtain control over the Ethereum Network through its influence over core developers by gaining direct control over a core developer or an otherwise influential programmer. The less that the Ethereum ecosystem grows, the greater the possibility that a malicious actor may be able to maliciously influence the Ethereum Network in this manner. Moreover, it is possible that a group of Ether holders that together control more than a substantial amount of outstanding Ether are in fact part of the initial or current core developer group, or are otherwise influential members of the Ethereum community. To the extent that the initial or current core developer groups also control higher than a threshold of outstandingstaked Ether necessary for an attack, as some believe, the risk of this particular group of users causing the Ethereum Network to adopt updates to the core protocol that this particular group wants to be implemented will be even greater, and should this materialize, it may adversely affect the value of the Shares. Further, the Ethereum Network may also be adversely affected if core developers become aligned with, or culturally or organizationally captured by, particular companies, foundations, interest groups, or other coordinated constituencies whose priorities diverge from those of the broader community, as such influence may shape protocol development, governance outcomes, or upgrade decisions in ways that negatively affect the network or the market price of the related digital asset. In an example from the Bitcoin Network, historically, perceptions—whether accurate or not—that certain core developers were aligned with or influenced by specific organizations, such as concerns voiced by some regarding Blockstream’s relationship with core developers during the Bitcoin scaling debates, contributed to community division, reduced consensus around protocol direction, and ultimately played a role in the network split that resulted in Bitcoin Cash. Similar perceptions in the future could impede protocol development, fragment the community, or otherwise negatively affect the growth, utility, or market price of Ether, which may adversely affect the value of the Shares.

When the Trust and the Sponsor, acting on behalf of the Trust, sell or deliver, as applicable, Ether or, subject to NYSE Arca obtaining regulatory approval from the SEC, Incidental Rights and/or IR Virtual Currency, they generally do not transact directly with counterparties other than the Authorized Participant, a Liquidity Provider or other similarly eligible financial institutions that are subject to federal and state licensing requirements and maintain practices and policies designed to comply with AML and KYC regulations. When an Authorized Participant or a Liquidity Provider sources Ether in connection with the creation of the Shares or facilitates transactions in Ether at the direction of the Trust or the Sponsor, it directly faces its counterparty and, in all instances, the Authorized Participant or the Liquidity Provider, as applicable, follow policies and procedures designed to ensure that it knows the identity of its counterparty. The Authorized Participant is a registered broker-dealer and therefore subject to AML and countering the financing of terrorism obligations under the Bank Secrecy Act as administered by FinCEN and further overseen by the SEC and FINRA.

As part of its counterparty onboarding process, each of the Authorized Participant and the Liquidity Provider uses third-party services to screen prospective counterparties against various watch lists, including the Specially Designated Nationals List of the Treasury Department Office of Foreign Assets Control (“OFAC”) and countries and territories identified as non-cooperative by the Financial Action Task Force. If the Sponsor, the Trust, the Authorized Participant or the Liquidity Provider were nevertheless to transact with such a sanctioned entity, the Sponsor, the Trust, the Authorized Participant and the Liquidity Provider would be at increased risk of potential criminal or civil lawsuits.

SinceIn the fourthpast quarterand through to the date of 2021this andAnnual to date,Report, digital asset prices have fluctuatedexperienced widely.significant Thisfluctuations, has ledleading to volatility and disruption in the digital asset markets and financial difficulties for several prominent industry participants, including Digital Asset Trading Platforms, hedge funds and lending platforms. For example, in the first half of 2022, digital asset lenders Celsius Network LLC and Voyager Digital Ltd. and digital asset hedge fund Three Arrows Capital each entered into insolvency proceedings. This resulted in a loss of confidence in participants in the digital asset ecosystem, negative publicity surrounding digital assets more broadly and market-wide declines in digital asset trading prices and liquidity.

Thereafter, in November 2022, FTX, the third largest Digital Asset Trading Platform by volume at the time, halted customer withdrawals amid rumors of the company’s liquidity issues and likely insolvency. Shortly thereafter, FTX’s CEO resigned and FTX and several affiliates of FTX filed for bankruptcy. The U.S. Department of Justice subsequently brought criminal charges, including charges of fraud, violations of federal securities laws, money laundering, and campaign finance offenses, against FTX’s former CEO and others. In November 2023, FTX’s former CEO was convicted of fraud and money laundering. Similar charges related to violations of anti-money laundering laws were brought in November 2023 against Binance and its former CEO. FTX is also under investigation by the SEC, the Justice Department, and the Commodity Futures Trading Commission, as well as by various regulatory authorities in the Bahamas, Europe and other jurisdictions.

In response to these events, the digital asset markets have experienced extreme price volatility and declines in liquidity. In addition, several other entities in the digital asset industry filed for bankruptcy following FTX’s bankruptcy filing, such as BlockFi Inc. and Genesis Global Capital, LLC (“Genesis Capital”), a subsidiary of Genesis Global Holdco, LLC (“Genesis Holdco”). The SEC also brought charges against Genesis Capital and Gemini Trust Company, LLC (“Gemini”) in January 2023 for their alleged unregistered offer and sale of securities to retail investors. In October 2023, the New York Attorney General (“NYAG”) brought charges against Gemini, Genesis Capital, Genesis Asia Pacific PTE. LTD. (“Genesis Asia Pacific”), Genesis Holdco (together with Genesis Capital and Genesis Asia Pacific, the “Genesis Entities”), Genesis Capital’s former CEO, DCG, and DCG’s CEO alleging violations of the New York Penal Law, the New York General Business Law and the New York Executive Law. In February 2024, the NYAG amended its complaint to expand the charges against Gemini, the Genesis Entities, Genesis Capital’s former CEO, DCG, and DCG’s CEO to include harm to additional investors. Also in February 2024, the Genesis Entities entered into a settlement agreement with the NYAG to resolve the NYAG’s allegations against the Genesis Entities, which settlement was subsequently approved by the Bankruptcy Court of the Southern District of New York.

These events have also led to significant negative publicity around digital asset market participants including DCG, Genesis and DCG’s other affiliated entities. This publicity could negatively impact the reputation of the Sponsor and have an adverse effect on the trading price and/or the value of the Shares. Moreover, sales of a significant number of Shares of the Trust as a result of these events could have a negative impact on the trading price of the Shares.

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 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 the Ether held by the Trust, including Ether earned as Staking Consideration, 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 is not managed like a business corporation or an active investment vehicle. The Trust will not utilize leverage, derivatives or any similar arrangements in seeking to meet its investment objective.

On July 23, 2024, the Trust completed its previously announced pro rata distribution of 310,158,500 shares of Grayscale Ethereum Staking 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.

The cost basis of the Ether received by the Trust 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.

Financial Highlights for the Years ended December 31, 2024,2025, 20232024 and 20222023 (All amounts in the following table and the subsequent paragraphs, except Share, per Share, Ether and price of Ether amounts, are in thousands)

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

Net realized and unrealized gainloss on investment in Ether for the year ended December 31, 20242025 was $2,767,727,($542,295), which includes a realized gain of $157,557$68,726 on the transfer of Ether to pay the Sponsor’s Fee, a realized gain of $3,108,025$1,710,658 on the sale of Ether to meet redemptions, anet realizedchange gainin ofunrealized $888,140appreciation/depreciation on the saleSponsor’s Staking Fee payable in Ether of Ether related to the Initial Distribution to Grayscale Ethereum Mini Trust ETF,$181, and net change in unrealized appreciation/depreciation on investment in Ether of ($1,385,995$2,321,860). Net realized and unrealized gainloss on investment in Ether for the year was driven by Ether price appreciationdepreciation from $2,281.10 per Ether as of December 31, 2023, to $3,340.40 per Ether as of December 31, 2024.2024, to $2,971.94 per Ether as of December 31, 2025. Net increasedecrease in net assets resulting from operations was $2,585,133($618,753) for the year ended December 31, 2024,2025, which consisted of the net realized and unrealized gainloss on investment in Ether, lessand the Sponsor’sNet FeeInvestment Loss of $182,594.$76,458. Net assets decreased to $4,735,980$2,703,115 at December 31, 2024,2025, a 30%43% decrease for the year. The decrease in net assets resulted from the aforementioned Ether price appreciation, partially offset bydepreciation, the withdrawal of approximately 59,53528,363 Ether to pay the foregoing Sponsor’s Fee, the payable of approximately 3,798 Ether to pay the foregoing Sponsor’s Staking Fee, and the redemption of approximately 1,197,072704,785 Ether, with a value of $3,611,158$2,158,500 from the Trust, andpartially offset by the Initial Distributioncontribution of approximately 292,263221,891 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$744,388 to the Trust in connection with Share creations during the year.year, and the contribution of approximately 3,798 Ether with a value of $12,167 to the Trust in connection with Staking Rewards.

Net realized and unrealized lossgain on investment in Ether for the year ended December 31, 20222024 was ($7,549,251),$2,767,727, which includes a realized gain of $120,933$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 Staking Mini ETF, and net change in unrealized appreciation/depreciation on investment in Ether of ($7,670,184$1,385,995). Net realized and unrealized lossgain on investment in Ether for the year was driven by Ether price depreciationappreciation from $3,644.75$2,281.10 per Ether as of December 31, 2021,2023, to $1,201.33$3,340.40 per Ether as of December 31, 2022.2024. Net decreaseincrease in net assets resulting from operations was ($7,702,493)$2,585,133 for the year ended December 31, 2022,2024, which consisted of the net realized and unrealized lossgain on investment in Ether, plusless the Sponsor’s Fee of $153,242.$182,594. Net assets decreased to $3,649,198$4,735,980 at December 31, 2022,2024, a 68%30% decrease for the year. The decrease in net assets resulted from the aforementioned Ether price depreciation and the withdrawal of approximately 76,90159,535 Ether to pay the foregoing Sponsor’s Fee.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 Staking Mini 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.

AsThe ofPrincipal DecemberMarket 31,NAV 2024, theand Principal Market NAV per Share wasare 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.date, Asin ofaccordance Decemberwith 31,U.S. 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.GAAP.

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. 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, the Sponsor authorized the commencement of a redemption program. 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.

The following table illustrates the movements in the Index Price from January 1, 20202021 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, 2024.2025. 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.

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, 20202021 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, 2024.2025.

Other than the risk factors included below, thereThere have been no material changes to the Risk Factors last reported under “Part I, Item 1A. Risk Factors” of our Annual Report.

Financial Highlights for the Three and Six Months Ended MarchJune 31,30, 2026 and 2025 (All amounts in the following table and the subsequent paragraphs, except Share, Ether and price of Ether amounts, are in thousands)

Net assets isin the above table and subsequent paragraphs are calculated in accordance with U.S. 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 loss on investment in Ether for the three months ended MarchJune 31,30, 2026 was ($771,006$398,708), which includes a realized gain of $6,960$4,481 on the transfer of Ether to pay the Sponsor’s Fee, a realized gain of $212,803$79,779 on the sale of Ether to meet redemptions, a realized gain of $8,853$3,082 on the sale of Ether for Income Distribution, a realized gain of $2,855$739 on the transfer of Ether to pay the Sponsor’s Staking Fee, and net change in unrealized appreciation/depreciation on investment in Ether of ($1,002,296) and net change in unrealized appreciation/depreciation on the Sponsor’s Staking Fee payable of ($181$486,789). Net realized and unrealized loss on investment in Ether for the period was driven by Ether price depreciation from $2,971.94 per Ether as of December 31, 2025, to $2,095.22 per Ether as of March 31, 2026, to $1,578.53 per Ether as of June 30, 2026. Net decrease in net assets resulting from operations was ($775,631$402,501) for the three months ended MarchJune 31,30, 2026, which consisted of the net realized and unrealized loss on investment in Ether, and the net investment loss of $4,625.$3,793. Net assets decreased to $1,784,951$1,223,344 at MarchJune 31,30, 2026, a 34%31% decrease for the three-month period. The decrease in net assets resulted from the aforementioned Ether price depreciation, the withdrawal of approximately 5,3805,048 Ether to pay the foregoing Sponsor’s Fee, the withdrawal of approximately 1,667834 Ether to pay the foregoing Sponsor’s Staking Fee, the payable of approximately 9 Ether to pay the foregoing Sponsor’s Staking Fee, and the redemption of approximately 137,29985,655 Ether with a value of $362,253$179,607 from the Trust, partially offset by the contribution of approximately 86,91313,725 Ether with a value of $234,110$27,261 to the Trust in connection with Share creations during the period and the contribution of approximately 4,3324,046 Ether with a value of $10,522$8,286 in connection with Staking Rewards.

Net realized and unrealized lossgain on investment in Ether for the three months ended MarchJune 31,30, 2025 was ($1,965,068),$770,042, which includes a realized gain of $18,140$12,074 on the transfer of Ether to pay the Sponsor’s Fee, a realized gain of $504,379$153,517 on the sale of Ether to meet redemptions, and net change in unrealized appreciation/depreciation on investment in Ether of ($2,487,587).$604,451. Net realized and unrealized lossgain on investment in Ether for the period was driven by Ether price depreciationappreciation from $3,340.40 per Ether as of December 31, 2024, to $1827.33$1,827.33 per Ether as of March 31, 2025, to $2,516.23 per Ether as of June 30, 2025. Net decreaseincrease in net assets resulting from operations was ($1,986,868)$754,396 for the three months ended MarchJune 31,30, 2025, which consisted of the net realized and unrealized lossgain on investment in Ether, plusless the Sponsor’s Fee of $21,800.$15,646. Net assets decreasedincreased to $2,223,557$2,836,933 at MarchJune 31,30, 2025, a 53%28% decreaseincrease for the three-month period. The decreaseincrease in net assets resulted from the aforementioned Ether price depreciation,appreciation and the contribution of approximately 25,227 Ether, with a value of $64,761 to the Trust in connection with Share creations during the period, partially offset by the withdrawal of approximately 8,0717,159 Ether to pay the foregoing Sponsor’s Fee, and the redemption of approximately 226,051107,448 Ether, with a value of $605,818$205,781 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.

The Trust’s NAV and NAV per Share are 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. The Digital Asset Trading Platforms included in the Index (the “Constituent Trading Platforms”) as of MarchJune 31,30, 2026, were Coinbase,Binance, Bitstamp by Robinhood, Bullish, Bybit, Crypto.com, Gate, Gemini, HashKey, Kraken, Crypto.com, LMAX Digital, Bullish,OKX, and Bitstamp by Robinhood.OSL. The Digital Asset Trading Platforms included in the Index as of MarchJune 31,30, 2025, were Coinbase, Kraken, Bullish, and Crypto.com. The Digital Asset Trading Platforms included in the Index as of May 4, 2026, were Binance, Bitstamp by Robinhood, Bullish, Bybit, Crypto.com, GATE, Gemini, Hashkey, Kraken,and LMAX Digital, and OKX.Digital. 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 Trust’s performance prior to July 23, 2024 is based on market-determined prices on theOTC OTCQX marketplaceMarkets 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 commencement of the Trust’s operations) to MarchJune 31,30, 2026. For more information on the determination of the Trust’s NAV, see “Item 1. Business—Overview of the Ethereum Industry and Market—Ether Value—The Index and the Index Price” in our Annual Report.

The following table illustrates the movements in the Index Price from AprilJuly 1, 2021 to MarchJune 31,30, 2026. The Sponsor has not observed a material difference between the Index Price and average prices from the Constituent Trading Platforms as of MarchJune 31,30, 2026, individually or as a group.

The following table illustrates the movements in the Digital Asset Market price of Ether, as reported on the Trust’s principal market, from AprilJuly 1, 2021 to MarchJune 31,30, 2026.

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

The following chart sets out the historical closing prices for the Shares as reported by NYSE Arca and the Trust’s NAV per Share from July 23, 2024 to MarchJune 31,30, 2026.

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 OTCQXOTC Markets divided by the Trust’s NAV per Share from June 20, 2019 to July 22, 2024.

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 divided by the Trust’s NAV per Share from July 23, 2024 to MarchJune 31,30, 2026.