The Fidelity Ethereum Fund, an exchange-traded product (ETP) established on October 31, 2023, aims to track the performance of ether, as measured by the Fidelity Ethereum Reference Rate. As of September 30, 2024, the Fund reported total assets and net assets of $424.5 million, reflecting a significant increase from $4.4 million on June 30, 2024. This growth was primarily driven by the issuance of 16,375,000 shares, resulting in a total of 16,150,000 shares outstanding by the end of the reporting period.

The Fund's performance for the three months ending September 30, 2024, was marked by a net decrease in net assets resulting from operations of $58.6 million. This decline was attributed to a net unrealized depreciation on investments in ether of $56.5 million and a net realized loss of $2.1 million. The net investment income for the same period was also negative, amounting to $(2.1 million). The Fund's net asset value (NAV) per share decreased from $34.79 at the beginning of the period to $26.28 by the end, representing a decline of 24.63%. The market value per share similarly fell from $34.87 to $25.97, reflecting a total return of -25.53%.

The Fund's investment strategy is concentrated solely in ether, with the total investment in ether valued at $424.5 million as of September 30, 2024. The cost of this investment was $481.4 million, indicating a significant unrealized loss. The price of ether decreased by 23.79% during the reporting period, from $3,448.77 to $2,628.44.

In terms of operational activities, the Fund reported a net cash outflow from operating activities of $(483.5 million) for the period from May 24, 2024, to September 30, 2024. However, it generated $488.8 million from the issuance of capital shares, leading to a net cash inflow from financing activities of $483.5 million.

The Fund's management has waived the Sponsor Fee of 0.25% until December 31, 2024, to support its initial operations. Fidelity Service Company, Inc. serves as the Trust’s administrator, while Fidelity Digital Asset Services, LLC acts as the custodian for the Fund's ether holdings. The Trust has no off-balance-sheet financing arrangements or loan guarantees, and it does not expect any material impact from recent accounting updates related to crypto assets.