VanEck Ethereum ETF Reports $146.4 Million NAV, Significant Share Growth Despite ETH Price Decline

The VanEck Ethereum ETF (ETHV), a Delaware statutory trust formed in March 2021, reported a net asset value (NAV) of $146.4 million at the end of its fiscal year on December 31, 2024. This represents a significant increase from its NAV of $100,000 on May 20, 2024, the date of its initial seed investment. The increase is primarily attributed to a substantial rise in outstanding shares, from 2,000 to 3 million, resulting from creation and redemption activity. However, this growth was partially offset by a 2.37% decrease in the price of Ethereum (ETH) during the period, from $3,414 to $3,333.

The Trust's net increase in net assets resulting from operations for the year was $8.6 million. This figure reflects a net unrealized appreciation of $10.2 million on its ETH holdings, offset by a net realized loss of $1.6 million from ETH sold to facilitate share redemptions. The Trust reported no expenses during this period due to a waiver of the 0.20% Sponsor Fee on the first $1.5 billion of net assets, a waiver effective from July 23, 2024 to July 22, 2025. The Sponsor Fee, payable monthly in ETH, will be 0.20% of average daily net assets after July 22, 2025.

During the fiscal year, 150,000 shares (six baskets) were redeemed. The Trust's shares are listed on the Cboe BZX Exchange and are currently held by approximately 57 participating shareholders of record. The Trust does not actively manage its ETH holdings and does not engage in strategies to profit from or mitigate ETH price volatility. The Trust's operations involve selling shares in baskets to authorized participants in exchange for cash to purchase ETH, and conversely, selling ETH to distribute cash to participants redeeming shares.

The Trust's financial performance is directly tied to the price of ETH, which the filing notes has exhibited periods of extreme volatility. The filing details the MarketVector Ethereum Benchmark Rate, a composite reference rate used to determine the Trust's NAV, and outlines the methodology for its calculation, including the selection and weighting of five constituent trading platforms (Bitstamp, Bullish, Coinbase, Gemini, and Kraken). The filing also extensively discusses various risks associated with ETH, the Ethereum network, and the digital asset market more broadly, including regulatory uncertainty, cybersecurity threats, and the potential for market manipulation.

Looking forward, the filing emphasizes the ongoing regulatory uncertainty surrounding digital assets and the potential for future legislative or regulatory developments to significantly impact the value of ETH and, consequently, the Trust's shares. The Trust's ability to operate efficiently also depends on the continued participation of authorized participants and liquidity providers, and the filing highlights the risks associated with their potential withdrawal or failure. The filing concludes with a statement that the Trust's future success is subject to numerous risks and uncertainties.