Bitwise Ethereum ETF Commences Operations and Reports Financial Results for 2024

Bitwise Ethereum ETF (ETHW), a Delaware statutory trust, commenced operations on July 22, 2024, and began trading on the NYSE Arca Inc. on July 23, 2024. The Trust's investment objective is to provide shareholders with exposure to the value of ether, less operational expenses and liabilities, using the CME CF Ether – Dollar Reference Rate – New York Variant as its pricing index. As of December 31, 2024, the Trust held 121,101.8582 ether, valued at approximately $405.2 million based on the pricing index and $404.5 million based on the Lukka Prime Rate in its principal market (Crypto.com). The Trust reported a net increase in net assets resulting from operations of approximately $815,000 for the period from July 22, 2024 to December 31, 2024. This included a net realized loss of $9,412,000 on ether sales for redemptions and a net unrealized gain of $10,227,000.

During the period from July 23, 2024 to December 31, 2024, ETHW shares traded at an average premium of 0.04% relative to the Trust's NAV. The Trust sold 19,910,000 shares for aggregate proceeds of $472,721,594 from its initial public offering through March 6, 2025, excluding redemptions. Prior to the commencement of operations, Bitwise Investment Advisers, LLC (the Sponsor) and its affiliate, Bitwise Investment Manager, LLC, conducted transactions involving 100,008 shares, which were subsequently redeemed or sold. The Trust redeemed 2,060,000 shares during the fourth quarter of 2024. The Trust has no employees.

The Trust's primary expense is the 0.20% annual Sponsor Fee on its ether holdings. The Sponsor waived the fee on the first $500 million of assets until January 22, 2025. The Sponsor covers other ordinary operating expenses, including service provider fees and legal expenses up to $500,000 annually. Extraordinary expenses, such as taxes and litigation costs, are not assumed by the Sponsor. The Trust's only assets are ether and cash held for transactions and expenses. The Trust does not borrow to meet liquidity needs.

The Trust's financial statements were audited by KPMG LLP, who concluded that the statements fairly present the Trust's financial position as of December 31, 2024, and results of operations for the period from July 22, 2024 to December 31, 2024, in conformity with U.S. GAAP. The Trust is classified as a grantor trust for U.S. federal income tax purposes, meaning income and expenses flow through to shareholders. The Trust is an "emerging growth company" under the JOBS Act and utilizes certain exemptions from reporting requirements. The Trust's 10-K filing details numerous risk factors associated with investing in the Trust, including those related to ether price volatility, regulatory uncertainty, cybersecurity threats, and reliance on service providers. The filing also includes a discussion of the Trust's accounting policies, including its fair value determination methodology for ether.