GRAYSCALE ETHEREUM TRUST 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 audited financial statements and related notes included elsewhere in this Annual Report, which have been prepared in accordance with generally accepted accounting principles inthe 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 discussed below and elsewhere in this Annual Report, particularly in "Item 1A. Risk Factors" and "Forward-Looking Statements."
Trust Overview
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 ETH and,
from time to time on a periodic basis, issues Creation Baskets in exchange for
deposits of ETH. As a passive investment vehicle, the Trust's investment
objective is for the value of the Shares (based on ETH per Share) to reflect the
value of ETH held by the Trust, 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 ETH, the Shares are designed to provide investors
with a cost-effective and convenient way to gain investment exposure to ETH. The
Trust is not managed like a business corporation or an active investment
vehicle.
As of December 31,
2021 2020 2019 3
Number of Shares authorized Unlimited Unlimited Unlimited
Number of Shares outstanding 310,158,500 285,269,400 47,071,800Number of Shares freely tradable (1) 304,018,381 46,430,579
4,098,915
Number of beneficial holders owning at least 100 Shares (2) 42 453 95 Number of holders of record (2) 42 453 95 (1) Includes the total number of Shares that are not restricted securities as such term is defined under Rule 144. (2)Includes Cede & Co. as nominee for DTC for the Shares traded on OTCQX. Therefore, this number does not include the individual holders who have bought/sold Shares on OTCQX or transferred their eligible Shares to their brokerage accounts. (3) Share amounts have been retroactively adjusted to reflect the 9-for-1 Share Split of the Trust's issued and outstanding Shares completed onDecember 17, 2020 .
Critical Accounting Policies and Estimates
Investment Transactions and Revenue Recognition
The Trust considers investment transactions to be the receipt of ETH for Share creations and the delivery of ETH for Share redemptions or for payment of expenses in ETH. At this time, the Trust is not accepting redemption requests from shareholders. The Trust records its investment transactions on a trade date basis and changes in fair value are reflected as net change in unrealized appreciation or depreciation on investments. Realized gains and losses are calculated using the specific identification method. Realized gains and losses are recognized in connection with transactions including settling obligations for the Sponsor's Fee in ETH.
Principal Market and Fair Value Determination
To determine which market is the Trust's principal market (or in the absence of a principal market, the most advantageous market) for purposes of calculating the Trust's NAV, the Trust followsFinancial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 820-10, which outlines the application of fair value accounting. ASC 820-10 determines fair value to be the price that would be received for ETH in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires the Trust to assume that ETH is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact. The Trust only receives ETH from the Authorized Participant and does not itself transact on any Digital Asset Markets. Therefore, the Trust looks to the Authorized Participant when assessing entity-specific and market-based volume and level of activity for Digital Asset Markets. The Authorized Participant transacts in a Brokered Market, a Dealer Market, Principal-to-Principal Markets and Exchange Markets, each as defined in the FASB ASC Master Glossary. The Authorized Participant, as a related party of the Sponsor, 74 -------------------------------------------------------------------------------- provides information about the Digital Asset Markets on which it transacts to the Trust. In determining which of the eligible Digital Asset Markets is the Trust's principal market, the Trust reviews these criteria in the following order:
•
First, the Trust reviews a list of Digital Asset Markets and excludes any Digital Asset Markets that are non-accessible to the Trust and the Authorized Participant(s). The Trust or the Authorized Participant does not have access to Digital Asset Exchanges that do not have a BitLicense and has access only to non-Digital Asset Exchange Markets that the Authorized Participant reasonably believes are operating in compliance with applicable law, including federal and state licensing requirements, based upon information and assurances provided to it by each market.
•
Second, the Trust sorts the remaining Digital Asset Markets from high to low by entity-specific and market-based volume and activity of ETH traded on each Digital Asset Market in the trailing twelve months.
•
Third, the Trust then reviews intra-day pricing fluctuations and the degree of variances in price on Digital Asset Markets to identify any material notable variances that may impact the volume or price information of a particular Digital Asset Market.
•
Fourth, the Trust then selects a Digital Asset Market as its principal market based on the highest market volume, activity and price stability in comparison to the other Digital Asset Markets on the list. Based on information reasonably available to the Trust, Exchange Markets have the greatest volume and level of activity for the asset. The Trust therefore looks to accessible Exchange Markets as opposed to the Brokered Market, Dealer Market and Principal-to-Principal Markets to determine its principal market. As a result of the aforementioned analysis, an Exchange Market has been selected as the Trust's principal market. The Trust determines its principal market (or in the absence of a principal market the most advantageous market) annually and conducts a quarterly analysis to determine (i) if there have been recent changes to each Digital Asset Market's trading volume and level of activity in the trailing twelve months, (ii) if any Digital Asset Markets have developed that the Trust has access to, or (iii) if recent changes to each Digital Asset Market's price stability have occurred that would materially impact the selection of the principal market and necessitate a change in the Trust's determination of its principal market. The cost basis of the investment in ETH recorded by the Trust for financial reporting purposes is the fair value of ETH at the time of transfer. 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.
Investment Company Considerations
The Trust is an investment company for GAAP purposes and follows accounting and reporting guidance in accordance with the FASB ASC Topic 946, Financial Services -Investment Companies. The Trust uses fair value as its method of accounting for ETH in accordance with its classification as an investment company for accounting purposes. The Trust is not a registered investment company under the Investment Company Act of 1940. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates and these differences could be material.
Review of Financial Results
Financial Highlights for the Years ended
(All amounts in the following table and the subsequent paragraphs, except Share and per Share, ETH and price of ETH amounts, are in thousands)
For the Year Ended
2021 2020 2019
Net realized and unrealized gain (loss) on investment$ 8,946,394 $ 1,353,262 $ (39,411 ) Net increase (decrease) in net assets resulting from operations$ 8,728,949 $ 1,338,132 $ (40,329 ) Net assets$ 11,351,691 $ 2,188,127 $ 63,540 Net realized and unrealized gain on investment in ETH for the year endedDecember 31, 2021 was$8,946,394 which includes a realized gain of$185,516 on the transfer of ETH to pay the Sponsor's Fee and net change in unrealized appreciation on investment in ETH of$8,760,878 . Net realized and unrealized gain on investment in ETH for the year was driven by ETH price appreciation from$744.99 per ETH as ofDecember 31, 2020 to$3,644.75 per ETH as ofDecember 31, 2021 . Net increase in net assets resulting from operations was$8,728,949 for the year endedDecember 31, 2021 , which consisted of the net realized and unrealized gain on investment in ETH, less the Sponsor's Fee of$217,445 . Net assets increased to$11,351,691 atDecember 31, 2021 , a 419% increase for the year. The increase in net assets resulted from the aforementioned ETH price appreciation and the contribution of approximately 255,556 ETH 75 -------------------------------------------------------------------------------- with a value of$434,615 to the Trust in connection with Share creations during the period, partially offset by the withdrawal of approximately 78,146 ETH to pay the foregoing Sponsor's Fee. Net realized and unrealized gain on investment in ETH for the year endedDecember 31, 2020 was$1,353,262 , which includes a realized gain of$4,739 on the transfer of ETH to pay the Sponsor's Fee and$1,348,523 net change in unrealized appreciation on investment in ETH. Net realized and unrealized gain on investment in ETH for the year was driven by ETH price appreciation from$127.86 per ETH as ofDecember 31, 2019 to$744.99 per ETH as ofDecember 31, 2020 . Net increase in net assets resulting from operations was$1,338,132 for the year endedDecember 31, 2020 , which consisted of the net realized and unrealized gain on investment in ETH, less the Sponsor's Fee of$15,130 . Net assets increased to$2,188,127 atDecember 31, 2020 , a 3,344% increase for the year. The increase in net assets resulted from the aforementioned ETH price appreciation and the contribution of approximately 2,481,763 ETH with a value of$786,455 to the Trust in connection with Share creations during the period, partially offset by the withdrawal of 41,594 ETH to pay the foregoing Sponsor's Fee. Net realized and unrealized loss on investment in ETH for the year endedDecember 31, 2019 was ($39,411 ), which includes a realized loss of ($1,011 ) on the transfer of ETH to pay the Sponsor's Fee, ($9 ) net change in unrealized appreciation on the Sponsor's Fee payable, and ($38,391 ) net change in unrealized depreciation on investment in ETH. Net realized and unrealized loss on investment in ETH was driven by ETH price depreciation from$130.90 per ETH as ofDecember 31, 2018 to$127.86 per ETH as ofDecember 31, 2019 . Net decrease in net assets resulting from operations was ($40,329 ) for the year endedDecember 31, 2019 , which consisted of the net realized and unrealized loss on investment in ETH, plus the Sponsor's Fee of$918 . Net assets increased to$63,540 atDecember 31, 2019 , a 925% increase for the year. The increase in net assets was due to the contribution of approximately 454,791 ETH with a value of$97,669 to the Trust in connection with Share creations, partially offset by the aforementioned ETH price depreciation and the withdrawal of 5,491 ETH to pay the foregoing Sponsor's Fee. Cash Resources and Liquidity The Trust has not had a cash balance at any time since inception. When selling ETH, Incidental Rights and/or IR Virtual Currency in the Digital Asset Market to pay Additional Trust Expenses, the Sponsor endeavors to sell the exact number of ETH, Incidental Rights and/or IR Virtual Currency needed to pay expenses in order to minimize the Trust's holdings of assets other than ETH. As a consequence, the Sponsor expects that the Trust will not record any cash flow from its operations and that its cash balance will be zero at the end of each reporting period. Furthermore, the Trust is not a party to any off-balance sheet arrangements. In exchange for the Sponsor's Fee, the Sponsor has agreed to assume most of the expenses incurred by the Trust. As a result, the only ordinary expense of the Trust during the periods covered by this Annual Report was the Sponsor's Fee. The Trust is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to its liquidity needs. Selected Operating Data For the Year Ended December 31, 2021 2020 2019 (1) (All ETH balances are rounded to the nearest whole ETH) Ethereum: Opening Balance 2,937,122 496,953 47,653 Creations 255,556 2,481,763 454,791 Sponsor's Fee, related party (78,146 ) (41,594 ) (5,491 ) Closing balance 3,114,532 2,937,122 496,953 Accrued but unpaid Sponsor's Fee, related party - - - Net closing balance 3,114,532 2,937,122 496,953 Number of Shares: Opening balance 285,269,400 47,071,800 4,375,800 Creations 24,889,100 238,197,600 42,696,000 Closing balance 310,158,500 285,269,400 47,071,800 December 31, 2021 2020 2019 (1) Price of ETH on principal market (2)$ 3,644.75 $ 744.99 $ 127.86 NAV per Share (3)$ 36.60 $ 7.67 $ 1.35 Old Index Price (4)$ 3,730.30 $ 740.77 $ 130.35 Digital Asset Holdings per Share using Old Index Price (4)$ 37.46 $ 7.63 $ 1.38 76
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(1)
Share and per Share amounts for periods presented prior to the Share Split have been retroactively adjusted for the 9-for-1 Share Split of the Trust's issued and outstanding Shares completed onDecember 17, 2020 . (2) The Trust performed an assessment of the principal market atDecember 31, 2021 , 2020 and 2019, respectively, and identified the principal market asCoinbase Pro. (3) As ofDecember 31, 2021 , 2020 and 2019, respectively, the NAV per Share was calculated using the fair value of ETH based on the price provided byCoinbase Pro, the Digital Asset Exchange that the Trust currently considers its principal market, as of4:00 p.m. ,New York time, on the valuation date. (4) Prior toFebruary 1, 2022 , the Trust calculated itsDigital Asset Holdings andDigital Asset Holdings per Share by reference to the Old Index Price as of4:00 p.m. ,New York time, on the valuation date. The Old Index Price was calculated using non-GAAP methodology and is not used in the Trust's financial statements. EffectiveFebruary 1, 2022 , the Trust began using the Index Price to calculate itsDigital Asset Holdings andDigital Asset Holdings per Share as of4:00 p.m. ,New York time, on the valuation date. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results ofOperations-Historical Digital Asset Holdings and ETH Prices" for further information on theTrust's Digital Asset Holdings andDigital Asset Holdings per Share calculated using the Index Price. The Digital Asset Exchanges included in the Index as ofDecember 31, 2021 and 2020 were Coinbase Pro, Kraken, LMAX Digital andBitstamp . As ofDecember 31, 2019 , the Digital Asset Exchanges included in the Index consisted of Coinbase Pro,Bitstamp , itBit and Kraken. For accounting purposes, the Trust reflects creations and the ETH receivable with respect to such creations on the date of receipt of a notification of a creation but does not issue Shares until the requisite number of ETH is received. At this time, the Trust is not accepting redemption requests from shareholders. Subject to receipt of regulatory approval from theSEC and approval by the Sponsor in its sole discretion, the Trust may in the future operate a redemption program. The Trust currently has no intention of seeking regulatory approval to operate an ongoing redemption program. As ofDecember 31, 2021 , the Trust had a net closing balance with a value of$11,618,139,083 , based on the Old Index Price (non-GAAP methodology). As ofDecember 31, 2021 , the Trust had a total market value of$11,351,690,863 , based on the principal market (Coinbase Pro). As ofDecember 31, 2020 , the Trust had a net closing balance with a value of$2,175,732,163 , based on the Old Index Price (non-GAAP methodology). As ofDecember 31, 2020 , the Trust had a total market value of$2,188,126,819 , based on the principal market (Coinbase Pro). As ofDecember 31, 2019 , the Trust had a net closing balance with a value of$64,777,798 , based on the Old Index Price (non-GAAP methodology). As ofDecember 31, 2019 , the Trust had a total market value of$63,540,386 , based on the principal market (Coinbase Pro).
Historical
As movements in the price of ETH will directly affect the price of the Shares, investors should understand recent movements in the price of ETH. Investors, however, should also be aware that past movements in the ETH price are not indicators of future movements. Movements may be influenced by various factors, including, but not limited to, government regulation, security breaches experienced by service providers, as well as political and economic uncertainties around the world. For the period fromJanuary 1, 2019 toDecember 31, 2021 , the average difference in price between the Old Index Price and the Index Price and the average difference inDigital Asset Holdings of the Trust as calculated using the Old Index Price and the Index Price was 0.40%. The following chart illustrates the movement in the Index Price, the Old Index Price, theTrust's Digital Asset Holdings per Share based on the Old Index Price and the Index Price and the Trust's net asset value per share as calculated in accordance with GAAP (as adjusted for the Share Split for periods prior toDecember 17, 2020 ) fromDecember 14, 2017 toDecember 31, 2021 . For more information on the determination of theTrust's Digital Asset Holdings , see "Item 1. Business-Overview of the ETH Industry and Market-ETH Value-The Index and the Index Price." 77
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[[Image Removed: img22804861_0.jpg]]
The following table illustrates the movements in the Old Index Price from the
beginning of the Trust's operations on December 14, 2017 to December 31, 2021 .
Since the beginning of the Trust's operations, the Old Index Price has ranged
from $84.31 to $4,790.65 , with the straight average being $929.14 . The Sponsor
has not observed a material difference between the Old Index Price and average
prices from the constituent Digital Asset Exchanges individually or as a group.
High Low
Last
Old Index Old Index End of business
Period Average Price Date Price Date period day
December 14, 2017 (the
inception of the Trust's
operations) to December 31,
2017 $ 715.00 $ 818.87 12/19/2017 $ 660.31 12/22/2017 $ 719.60 $ 734.25
Twelve months ended December
31, 2018 $ 478.06 $ 1,314.70 1/10/2018 $ 84.31 12/14/2018 $ 135.07 $ 135.07
Twelve months ended December
31, 2019 $ 179.93 $ 337.35 6/26/2019 $ 102.74 2/6/2019 $ 130.35 $ 130.35
Twelve months ended December
31, 2020 $ 305.79 $ 740.77 12/31/2020 $ 114.54 3/16/2020 $ 740.77 $ 740.77
Twelve months ended December
31, 2021 $ 2,765.04 $ 4,790.65 11/9/2021 $ 737.16 1/1/2021 $ 3,730.30 $ 3,730.30
December 14, 2017 (the
inception of the Trust's
operations) to December 31,
2021 $ 929.14 $ 4,790.65 11/9/2021 $ 84.31 12/14/2018 $ 3,730.30 $ 3,730.30
The following table illustrates the movements in the Index Price from the
beginning of the Trust's operations on December 14, 2017 to December 31, 2021 .
Since the beginning of the Trust's operations, the Index Price has ranged from
$82.41 to $4,776.32 , with the straight average being $932.92 . The Sponsor has
not observed a material difference between the Index Price and average prices
from the constituent Digital Asset Exchanges individually or as a group.
78
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High Low
Last
End of business
Period Average Index Price Date Index Price Date period day
December 14, 2017 (the
inception of the Trust's
operations) to December 31,
2017 $ 728.69 $ 825.45 12/19/2017 $ 654.51 12/24/2017 $ 745.45 $ 734.44
Twelve months ended December
31, 2018 $ 480.09 $ 1,417.83 1/13/2018 $ 82.41 12/14/2018 $ 130.84 $ 130.84
Twelve months ended December
31, 2019 $ 180.52 $ 350.60 6/26/2019 $ 102.84 2/6/2019 $ 127.84 $ 127.84
Twelve months ended December
31, 2020 $ 307.03 $ 752.13 12/30/2020 $ 109.83 3/16/2020 $ 745.01 $ 745.01
Twelve months ended December
31, 2021 $ 2,775.83 $ 4,776.32 11/9/2021 $ 731.87 1/1/2021 $ 3,644.98 $ 3,644.98
December 14, 2017 (the
inception of the Trust's
operations) to December 31,
2021 $ 932.92 $ 4,776.32 11/9/2021 $ 82.41 12/14/2018 $ 3,644.98 $ 3,644.98
The following table illustrates the movements in the Digital Asset Market price
of ETH, as reported on the Trust's principal market, from the beginning of the
Trust's operations on December 14, 2017 to December 31, 2021 . Since the
beginning of the Trust's operations, the price of ETH has ranged from $82.34 to
$4,776.95 , with the straight average being $933 .00:
High Low
Digital
Digital Asset Last
Asset Market Market End of business
Period Average Price Date Price Date period day
December 14, 2017 (the
inception of the Trust's
operations) to December
31, 2017 $ 736.08 $ 829.91 12/19/2017 $ 677.76 12/24/2017 $ 750.11 $ 733.50
Twelve months ended
December 31, 2018 $ 479.95 $ 1,418.61 1/13/2018 $ 82.34 12/14/2018 $ 130.90 $ 130.90
Twelve months ended
December 31, 2019 $ 180.54 $ 350.76 6/26/2019 $ 102.88 2/6/2019 $ 127.86 $ 127.86
Twelve months ended
December 31, 2020 $ 307.02 $ 751.88 12/30/2020 $ 110.29 3/16/2020 $ 744.99 $ 744.99
Twelve months ended
December 31, 2021 $ 2,775.91 $ 4,776.95 11/9/2021 $ 731.87 1/1/2021 $ 3,644.75 $ 3,644.75
December 14, 2017 (the
inception of the Trust's
operations) to December
31, 2021 $ 933.00 $ 4,776.95 11/9/2021 $ 82.34 12/14/2018 $ 3,644.75 $ 3,644.75
Secondary Market Trading
The Trust's Shares have been quoted on OTCQX under the symbol ETHE since June
20, 2019 . The price of the Shares as quoted on OTCQX has varied significantly
from the Digital Asset Holdings per Share. From June 20, 2019 to December 31,
2021 , the maximum premium of the closing price of the Shares quoted on OTCQX
over the value of the Trust's Digital Asset Holdings per Share was 956% (949%
based on Old Index Price) and the average premium was 191% (187% based on Old
Index Price), and the maximum discount of the closing price of the Shares quoted
on OTCQX below the value of the Trust's Digital Asset Holdings per share was 16%
(15% based on Old Index Price) and the average discount was 6% (6% based on Old
Index Price). As of December 31, 2021 , the Trust's Shares were quoted on OTCQX
at a discount of 12% (14% based on Old Index Price) to the Trust's Digital Asset
Holdings per Share. The closing price of the Shares, as quoted on OTCQX at 4:00
p.m. , New York time, on each business day, has been quoted at a discount on 210
days (198 days based on Old Index Price).
79
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The following table sets out the range of high and low closing prices for the
Shares as reported by OTCQX, the Trust's net asset value per Share calculated in
accordance with GAAP and the Trust's Digital Asset Holdings per Share using both
the Old Index Price and the Index Price for each of the quarters since June 20,
2019 .
High Low
Digital Digital
Asset Asset
Holdings Holdings
per Share per Share
Digital Asset using Old Digital Asset using Old
NAV per Holdings per Index NAV per Holdings per Index
OTCQX Share (2) Share(3) Price(3) OTCQX Share(2) Share(3) Price(3)
2019
Second
quarter (1) $ 24.67 $ 3.75 $ 3.75 $ 3.61 $ 13.33 $ 1.51 $ 1.51 $ 1.52
Third
quarter (1) $ 12.00 $ 3.32 $ 3.32 $ 3.34 $ 2.41 $ 1.75 $ 1.75 $ 1.74
Fourth
quarter (1) $ 4.54 $ 2.04 $ 2.04 $ 2.04 $ 2.53 $ 1.28 $ 1.28 $ 1.31
2020
First
quarter (1) $ 15.97 $ 2.99 $ 3.00 $ 2.95 $ 2.78 $ 1.16 $ 1.15 $ 1.20
Second
quarter (1) $ 26.61 $ 2.58 $ 2.58 $ 2.56 $ 7.83 $ 1.37 $ 1.37 $ 1.39
Third
quarter (1) $ 15.89 $ 4.94 $ 4.94 $ 4.79 $ 4.26 $ 2.35 $ 2.35 $ 2.36
Fourth
quarter $ 23.40 $ 7.74 $ 7.74 $ 7.63 $ 4.33 $ 3.52 $ 3.53 $ 3.51
2021
First
quarter $ 22.09 $ 20.39 $ 20.39 $ 20.44 $ 12.00 $ 7.53 $ 7.53 $ 7.59
Second
quarter $ 40.00 $ 41.73 $ 41.74 $ 42.76 $ 18.17 $ 18.16 $ 18.15 $ 18.22
Third
quarter $ 38.50 $ 39.94 $ 39.94 $ 39.80 $ 16.49 $ 18.17 $ 18.18 $ 17.93
Fourth
quarter $ 46.50 $ 48.14 $ 48.13 $ 48.28 $ 31.53 $ 33.33 $ 33.31 $ 31.86
(1)
Per Share amounts have been retroactively adjusted for the 9-for-1 Share Split
of the Trust's issued and outstanding Shares completed on December 17, 2020 .
(2)
The NAV is calculated using the fair value of ETH based on the price provided by
the Digital Asset Market that the Trust considers its principal market, which is
Coinbase Pro.
(3)
The Trust calculated its Digital Asset Holdings and Digital Asset Holdings per
Share by reference to the Old Index Price as of 4:00 p.m. , New York time, on the
valuation date. Effective February 1, 2022 , the Trust began using the Index
Price to calculate its Digital Asset Holdings and Digital Asset Holdings per
Share as of 4:00 p.m. , New York time, on the valuation date. See "Item 1.
Business-Overview of the ETH Industry and Market-ETH Value-The Index and the
Index Price-Determination of the Index Price." The Trust's Digital Asset
Holdings are derived from the Index Price as represented by the Index as of 4:00
p.m. , New York time, on the valuation date. Prior to February 1, 2022 , the
Trust's Digital Asset Holdings per Share was derived from the Old Index Price.
The Index Price is calculated using a non-GAAP methodology and is not used in
the Trust's financial statements. On January 19, 2020 , the Index Provider
removed itBit and added LMAX Digital to the Index as part of its scheduled
quarterly review. See "Item 1. Business-Trust Objective and Key Operating
Metrics."
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The following chart sets out the historical closing prices for the Shares as
reported by OTCQX and the Trust's Digital Asset Holdings per Share based on the
Index Price and the Old Index Price.
ETHE Premium/(Discount): ETHE Share Price vs.
($)
[[Image Removed: img22804861_1.jpg]]
The following chart sets out the historical premium and discount for the Shares
as reported by OTCQX and the Trust's Digital Asset Holdings per Share based on
the Index Price and the Old Index Price.
ETHE Premium/(Discount): ETHE Share Price vs.
(%)
[[Image Removed: img22804861_2.jpg]]
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