Grayscale Ethereum Staking Mini ETF: Q3 operations add $943M
Staking reward income was $26.705 million over nine months, while the Trust reported a -9.19% total return.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Grayscale Ethereum Staking Mini ETF reported a $943.082 million increase in net assets from operations for the three months ended September 30, 2026, compared with $931.931 million a year earlier. For the nine months, operations reduced net assets by $197.148 million, versus a $543.202 million increase in 2025; the nine-month total return was -9.19%, compared with 24.43%.
At September 30, 2026, the Trust held Ether valued at $2,481.194 million, including $1,992.358 million of staked Ether, and reported net assets of $2,481.190 million. Staking reward income was $26.705 million for the nine months. The Trust distributed $3,259,246 in cash to shareholders on September 4, equal to $0.034765 per Share; the distribution came from staking rewards and reduced Ether holdings through Ether sales. The Sponsor, Custodian and staking providers receive an aggregate 6% of gross staking rewards as fees. Ether’s price directly affects NAV, and the Trust identifies volatility, liquidity, operational and cybersecurity risks.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNine-month net investment income was $23.778 million, versus a $1.721 million loss.
Negative
- Moderate pointNine-month operations produced a $197.148 million loss; total return was -9.19%.
Filing Explained
Two post-quarter staking-reward payouts were funded by Ether sales, reducing Ether held by the Trust.
After quarter-end, the Trust paid cash distributions of
For the nine months ended
Key Figures
Key Terms
Staking Consideration technical
Validator Fees financial
Basket financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was ETH’s return for the first nine months of 2026?
How much staking reward income did ETH report?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
For the transition period from ______ to ______ |
Commission File Number
SPONSORED BY GRAYSCALE INVESTMENTS SPONSORS, LLC
(Exact Name of Registrant as Specified in Its Charter)
|
|
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices) (Zip Code)
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
|
|
|
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ |
|
Accelerated filer |
☐ |
|
|
|
|
|
|
Non-accelerated filer |
☐ |
|
Smaller reporting company |
|
|
|
|
|
|
|
|
|
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Number of Shares of the registrant outstanding as of November 2, 2026:
Grayscale® ETHEREUM staking MINI ETF
Table of Contents
|
|
Page |
|
|
|
PART I – FINANCIAL INFORMATION |
|
|
|
|
|
Item 1. |
Financial Statements (Unaudited) |
3 |
|
|
|
|
Statements of Assets and Liabilities at September 30, 2026 and December 31, 2025 |
3 |
|
|
|
|
Schedules of Investment at September 30, 2026 and December 31, 2025 |
4 |
|
|
|
|
Statements of Operations for the Three and Nine Months Ended September 30, 2026 and 2025 |
5 |
|
|
|
|
Statements of Changes in Net Assets for the Three and Nine Months Ended September 30, 2026 and 2025 |
6 |
|
|
|
|
Notes to the Unaudited Financial Statements |
7 |
|
|
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
15 |
|
|
|
Item 3. |
Quantitative and Qualitative Disclosures about Market Risk |
23 |
|
|
|
Item 4. |
Controls and Procedures |
23 |
|
|
|
PART II – OTHER INFORMATION |
|
|
|
|
|
Item 1. |
Legal Proceedings |
24 |
|
|
|
Item 1A. |
Risk Factors |
24 |
|
|
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
24 |
|
|
|
Item 3. |
Defaults Upon Senior Securities |
24 |
|
|
|
Item 4. |
Mine Safety Disclosures |
24 |
|
|
|
Item 5. |
Other Information |
24 |
|
|
|
Item 6. |
Exhibits |
25 |
|
|
|
SIGNATURES |
26 |
|
2
PART I – FINANCIAL INFORMATION:
Item 1. Financial Statements (Unaudited)
GRAYSCALE ETHEREUM STAKING MINI ETF
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
(Amounts in thousands, except Share and per Share amounts)
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Assets: |
|
|
|
|
|
|
||
Investment in Ether, at fair value (cost $ |
|
$ |
|
|
$ |
|
||
Receivable for investments sold |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
Liabilities: |
|
|
|
|
|
|
||
Sponsor’s Staking Fee payable, related party |
|
$ |
|
|
$ |
|
||
Payable for capital shares redeemed |
|
|
|
|
|
- |
|
|
Sponsor’s Fee payable, related party |
|
|
|
|
|
|
||
Total liabilities |
|
$ |
|
|
$ |
|
||
Net assets |
|
$ |
|
|
$ |
|
||
Shares issued and outstanding, |
|
|
|
|
|
|
||
Principal Market NAV per Share |
|
$ |
|
|
$ |
|
||
See accompanying notes to the unaudited financial statements.
3
GRAYSCALE ETHEREUM STAKING MINI ETF
SCHEDULES OF INVESTMENT (UNAUDITED)
(Amounts in thousands, except quantity of Ether and percentages)
September 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Quantity of |
|
|
Cost |
|
|
Fair Value(1) |
|
|
% of Net |
|
||||
Investment in Ether |
|
|
|
|
$ |
|
|
$ |
|
|
|
% |
||||
Total Investment |
|
|
|
|
$ |
|
|
$ |
|
|
|
% |
||||
Liabilities in Excess of Other Assets |
|
|
|
|
|
|
|
$ |
( |
) |
|
|
% |
|||
Net assets |
|
|
|
|
|
|
|
$ |
|
|
|
% |
||||
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Quantity of |
|
|
Cost |
|
|
Fair Value(1) |
|
|
% of Net |
|
||||
Investment in Ether |
|
|
|
|
$ |
|
|
$ |
|
|
|
% |
||||
Total Investment |
|
|
|
|
$ |
|
|
$ |
|
|
|
% |
||||
Liabilities in Excess of Other Assets |
|
|
|
|
|
|
|
$ |
( |
) |
|
|
% |
|||
Net assets |
|
|
|
|
|
|
|
$ |
|
|
|
% |
||||
See accompanying notes to the unaudited financial statements.
4
GRAYSCALE ETHEREUM STAKING MINI ETF
STATEMENTS OF OPERATIONS (UNAUDITED)
(Amounts in thousands)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Investment income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Staking Reward Income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Investment income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Investment income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sponsor's Staking Fee, related party |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sponsor’s Fee, related party |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sponsor’s Fee Waiver, related party |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
Net expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net investment income (loss) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Net realized and unrealized (loss) gain from: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net realized (loss) gain from: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Ether sold to pay expenses |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Ether sold for redemption of Shares |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Ether sold for income distribution |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Net realized (loss) gain |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Net change in unrealized appreciation/depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net realized and unrealized gain (loss) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Net increase (decrease) in net assets resulting from operations |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
See accompanying notes to the unaudited financial statements.
5
GRAYSCALE ETHEREUM STAKING MINI ETF
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
(Amounts in thousands, except change in Shares outstanding)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Increase (decrease) in net assets from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net investment income (loss) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Net realized (loss) gain |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Net change in unrealized appreciation/depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net increase (decrease) in net assets resulting from operations |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Increase in net assets from capital share transactions: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shares issued |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shares redeemed |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net increase in net assets resulting from capital share transactions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Decrease in net assets from distributions to shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Distributions to shareholders |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Total increase in net assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Beginning of period |
|
|
|
|
|
|
|
|
|
|
|
|
||||
End of period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Change in Shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shares outstanding at beginning of period |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shares issued |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shares redeemed |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net increase in Shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shares outstanding at end of period |
|
|
|
|
|
|
|
|
|
|
|
|
||||
See accompanying notes to the unaudited financial statements.
6
GRAYSCALE ETHEREUM STAKING MINI ETF
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. Organization
Grayscale Ethereum Staking Mini ETF (the “Trust”) is a Delaware Statutory Trust that was formed on April 23, 2024 and commenced operations on July 23, 2024. The Trust’s investment objective is for the value of the Shares (based on the Ether per Share) to reflect the value of the Ethereum tokens (“Ether”) held by the Trust and to reflect rewards from Staking a portion of the Trust’s Ether, less the Trust’s expenses and other liabilities. Staking on the Ethereum Network refers to the use of Ether, or the permission for Ether to be used through an agent or otherwise, in the Ethereum Network’s proof-of-stake validation protocol in exchange for the receipt of staking rewards paid in kind (“Staking”). The Trust issues Shares only in one or more blocks of
The Trust’s registration statement on Form S-1 relating to its continuous public offering of Shares was declared effective by the Securities and Exchange Commission (“SEC”) on July 22, 2024 and the Shares were listed and began trading on NYSE Arca, Inc. (“NYSE Arca”) under the symbol “ETH” on July 23, 2024.
Grayscale Investments, LLC (“GSI”) was the sponsor of the Trust before January 1, 2025, Grayscale Operating, LLC (“GSO”) was the co-sponsor of the Trust from January 1, 2025 to May 3, 2025, and Grayscale Investments Sponsors, LLC (“GSIS” or the “Sponsor”) was the co-sponsor of the Trust from January 1, 2025 to May 3, 2025 and is the sole remaining sponsor thereafter. GSI was, and each of GSO and GSIS are, a consolidated subsidiary of Digital Currency Group, Inc. (“DCG”). The Sponsor is responsible for the day-to-day administration of the Trust pursuant to the provisions of the Trust Agreement. The Sponsor is responsible for preparing and providing annual and quarterly reports on behalf of the Trust to investors and is also responsible for selecting and monitoring the Trust’s service providers. As partial consideration for the Sponsor’s services, the Trust pays the Sponsor a Sponsor’s Fee as discussed in Note 7. The Sponsor also acts as the sponsor and manager of other single-asset and diversified investment products, each of which is an affiliate of the Trust. Information related to the affiliated investment products can be found on the Sponsor’s website at www.grayscale.com/resources/regulatory-filings. Any information contained on or linked from such website is not part of nor incorporated by reference into these unaudited financial statements.
CSC Delaware Trust Company is the trustee of the Trust (the “Trustee”), The Bank of New York Mellon is the transfer agent (in such capacity, the “Transfer Agent”) and the administrator (in such capacity, the “Administrator”) of the Trust, Continental Stock Transfer & Trust Company is the co-transfer agent of the Trust (the “Co-Transfer Agent”), Coinbase, Inc. is the prime broker (the “Prime Broker”) of the Trust, Coinbase Custody Trust Company, LLC is the custodian of the Trust (the “Custodian”), Anchorage Digital Bank N.A. (the “Additional Custodian”) is an available alternative custodian of the Trust, and Foreside Fund Services, LLC is the marketing agent of the Trust (the “Marketing Agent”).
On July 23, 2024, Shares of the Trust began trading on NYSE Arca following the effectiveness of the Trust’s registration statement on Form S-1, as amended (File No. 333-278878). The Trust’s trading symbol on NYSE Arca is “ETH” and the CUSIP number for its Shares is 38964R203.
2. Summary of Significant Accounting Policies
In the opinion of management of the Sponsor of the Trust, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position as of September 30, 2026 and December 31, 2025 and results of operations for the three and nine months ended September 30, 2026 and 2025 have been made. The results of operations for the periods presented are not necessarily indicative of the results of operations expected for the full year. These unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2025 included in our Annual Report.
The following is a summary of significant accounting policies followed by the Trust:
The financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The Trust qualifies as an investment company for accounting purposes pursuant to the accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services—Investment Companies. As such, the Trust is exempt from the requirement to present a statement of cash flows pursuant to ASC Topic 230, Statement of Cash Flows. Accordingly, a statement of cash flows has not been presented. The Trust uses fair value as its method of accounting for Ether 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, as amended (the “Investment Company Act”). U.S. 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.
The Trust conducts its transactions in Ether, including receiving Ether for the creation of Shares and delivering Ether for the redemption of Shares and for the payment of the Sponsor’s Fee and Sponsor’s Staking Fee. The Sponsor will determine the Trust’s net asset value (“NAV”) on each business day as of 4:00 p.m., New York time, or as soon thereafter as practicable.
7
Cash and Cash Equivalents
Generally, the Trust does not intend to hold cash, except in connection with cash orders for creations or redemptions of Baskets and distributions to shareholders related to staking activities. Cash includes non-interest bearing non-restricted cash with one institution. Cash in a bank deposit account, at times, may exceed U.S. federally insured limits. The Trust has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk on such bank deposits.
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 net asset value in accordance with U.S. GAAP (the “Principal Market NAV”), the Trust follows ASC Topic 820-10, Fair Value Measurement, which outlines the application of fair value accounting. ASC 820-10 determines fair value to be the price that would be received for Ether 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 Ether 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 Ether in connection with a creation order from the Authorized Participant (or a service provider that facilitates the purchase of Ether in connection with the creation of Baskets, i.e., “Liquidity Provider”) and does not itself transact on any Digital Asset Markets (as defined herein). Therefore, the Trust looks to market-based volume and level of activity for Digital Asset Markets. The Authorized Participant(s), or a Liquidity Provider, may transact in a Brokered Market, a Dealer Market, Principal-to-Principal Markets and Exchange Markets (referred to as “Trading Platform Markets” in this Report), each as defined in the FASB ASC Master Glossary (collectively, “Digital Asset Markets”).
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 that maintain practices and policies designed to comply with anti-money laundering (“AML”) and know-your-customer (“KYC”) regulations, and non-Digital Asset Trading Platform Markets that the Trust 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 these Digital Asset Markets from high to low by market-based volume and level of activity of Ether traded on each Digital Asset Market in the trailing twelve months.
Third, the Trust then reviews 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-based volume, level of activity and price stability in comparison to the other Digital Asset Markets on the list. Based on information reasonably available to the Trust, Trading Platform Markets have the greatest volume and level of activity for the asset. The Trust therefore looks to accessible Trading Platform 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, a Trading Platform 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.
Investment Transactions and Revenue Recognition
The Trust considers investment transactions to be the receipt of Ether for Share creations and the delivery of Ether for Share redemptions, or for payment of expenses in Ether. 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 Ether.
Ether Staking
The Trust earns staking rewards by delegating a portion of its Ether on the Ethereum Network’s proof-of-stake consensus protocol. The Sponsor has entered into contractual arrangements with the Custodian and one or more third-party staking service providers, which may include affiliates of the Custodian or other institutional validators, to facilitate the staking of the Trust’s Ether. The Trust retains control of its Ether throughout the staking process. The delegation of Ether for staking purposes does not constitute a sale, transfer, or other
8
derecognition event, as control of the Ether is not transferred to the validator or staking provider. Accordingly, the staked Ether is not derecognized under ASC Topic 610-20, Other Income, Gains and Losses from the Derecognition of Nonfinancial Assets, or ASC Topic 350-60, Intangibles, Goodwill and Other, Crypto Assets.
The Trust recognizes staking rewards as revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under the written arrangements (the “Staking Arrangements”) with the Custodian and one or more third party staking providers (each, a “Staking Provider”), the validator (e.g., the Custodian or other staking provider) is considered the customer, as it receives access to the Trust’s staking capacity (i.e., the delegation of Ether), which represents the Trust’s performance obligation. In exchange, the Trust is entitled to staking rewards generated by the Ethereum protocol, net of a portion of the gross staking rewards generated thereunder, representing the Custodian’s fee and the Staking Provider’s share of such staking rewards (collectively, the “Validator Fees”).
Staking rewards represent variable consideration, as the amount of rewards is not known until the applicable validation activities are completed, and the Trust receives rewards in their custodial account. The contract term is the length of each staking epoch. Staking rewards are recognized as revenue when the Trust satisfies its performance obligations. Staking rewards are received in Ether, which represents non-cash consideration. Non-cash consideration is measured at fair value at the inception of each contract (i.e., the beginning of each staking epoch), in accordance with ASC 606.
Because the Trust is not the principal to the block validation service, it does not control the full output of the reward-generating activity, and instead receives net staking rewards, after Validator Fees are deducted. As such, the Trust presents staking revenue on a net basis, reflecting only the portion of protocol rewards to which it is entitled. Staking revenue is recorded as staking reward income on the Statements of Operations.
Fair Value Measurement
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the ‘exit price’) in an orderly transaction between market participants at the measurement date.
U.S. GAAP utilizes a fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Trust. Unobservable inputs reflect the Trust’s assumptions about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
The fair value hierarchy is categorized into three levels based on the inputs as follows:
The availability of valuation techniques and observable inputs can vary by investment. To the extent that valuations are based on sources that are less observable or unobservable in the market, the determination of fair value requires more judgment. Fair value estimates do not necessarily represent the amounts that may be ultimately realized by the Trust.
|
|
|
|
|
Fair Value Measurement Using |
|
||||||||||
(Amounts in thousands) |
|
Amount at |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
September 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment in Ether |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investment in Ether |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Segment Reporting
The Chief Executive Officer and Chief Financial Officer of the Sponsor act as the Trust’s chief operating decision maker (“CODM”). The Trust represents a single operating segment, as the CODM monitors the operating results of the Trust as a whole and the Trust’s passive investment objective is pre-determined in accordance with the terms of the Trust Agreement. The financial information in the form of the Trust’s total returns, expense ratios and changes in net assets (i.e., changes in net assets resulting from operations and capital
9
share transactions), which are used by the CODM to assess the segment’s performance, are consistent with that presented within the Trust’s financial statements. Segment assets are reflected on the accompanying Statements of Assets and Liabilities as Total assets and the only significant segment expenses, the Sponsor’s Fee, related party, and Sponsor’s Staking Fee, related party, are included in the accompanying Statements of Operations.
3. Fair Value of Ether
Ether is held by the Custodian on behalf of the Trust and is carried at fair value. As of September 30, 2026 and December 31, 2025, the Trust held
The Trust determined the fair value per Ether to be $
The following represents the changes in quantity of Ether and the respective fair value:
(Amounts in thousands, except Ether amounts) |
|
Quantity |
|
|
Fair Value |
|
||
Balance at December 31, 2024 |
|
|
|
|
$ |
|
||
Ether contributed |
|
|
|
|
|
|
||
Ether redeemed |
|
|
( |
) |
|
|
( |
) |
Ether distributed for expenses |
|
|
( |
) |
|
|
( |
) |
Net realized gain |
|
|
|
|
|
|
||
Net change in unrealized appreciation/depreciation |
|
|
|
|
|
|
||
Balance at September 30, 2025 |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
(Amounts in thousands, except Ether amounts) |
|
Quantity |
|
|
Fair Value |
|
||
Balance at December 31, 2025 |
|
|
|
|
$ |
|
||
Ether contributed |
|
|
|
|
|
|
||
Ether redeemed |
|
|
( |
) |
|
|
( |
) |
Staking Reward Income |
|
|
|
|
|
|
||
Ether distributed to shareholders |
|
|
( |
) |
|
|
( |
) |
Ether distributed for expenses |
|
|
( |
) |
|
|
( |
) |
Net realized loss |
|
|
|
|
|
( |
) |
|
Net change in unrealized appreciation/depreciation |
|
|
|
|
|
|
||
Balance at September 30, 2026 |
|
|
|
|
$ |
|
||
4. Distributions to Shareholders
Effective August 7, 2026, the Trust makes periodic cash distributions to shareholders from the net proceeds of staking rewards (the “Distribution Rewards Amount”), which represent gross staking rewards generated under the Staking Arrangements, net of the Validator Fees and the Sponsor’s Staking Fee. The Sponsor engages a Liquidity Provider to convert such amounts into U.S. dollars by reference to the Index Price at such time, with the net proceeds distributed to shareholders. Distributions are made pursuant to the Sponsor’s staking policy, and the timing and amount of any such distributions are subject to the Sponsor’s discretion and applicable requirements under the Trust Agreement.
During the three months ended September 30, 2026, the Trust made one cash distribution of $
10
5. Creations and Redemptions of Shares
The Trust creates and redeems Shares from time to time, but only in one or more Baskets issued to the Authorized Participant in exchange for the delivery of Ether to the Trust or the distribution of Ether by the Trust. The amount of Ether required for each Basket of Shares issued by the Trust (“Creation Basket”) or the amount of Ether for each Basket of Shares redeemed by the Trust (“Redemption Basket”) is determined by dividing (x) the amount of Ether owned by the Trust at 4:00 p.m., New York time, on such trade date of a creation or redemption order, after deducting the amount of Ether representing the U.S. dollar value of accrued but unpaid fees and expenses of the Trust, by (y) the number of Shares outstanding at such time and multiplying the quotient obtained by 10,000. Each Share represented approximately
As of the date of this Report, Authorized Participants may submit orders to create or redeem Shares through transactions that are referred to as “cash orders” or “in-kind orders”, in accordance with the agreements with Authorized Participants.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Activity in Number of Shares Issued and Redeemed: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shares issued |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shares redeemed |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net Change in Number of Shares Issued and Redeemed |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
(Amounts in thousands) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Activity in Value of Shares Issued and Redeemed: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Shares issued |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Shares redeemed |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net Change in Value of Shares Issued and Redeemed |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
6. Income Taxes
The Sponsor takes the position that the Trust is properly treated as a grantor trust for U.S. federal income tax purposes. Assuming that the Trust is a grantor trust, the Trust will not be subject to U.S. federal income tax. Rather, if the Trust is a grantor trust, each beneficial owner of Shares will be treated as directly owning its pro rata Share of the Trust’s net assets and a pro rata portion of the Trust’s income, gains, losses and deductions will “flow through” to each beneficial owner of Shares.
If the Trust were not properly classified as a grantor trust, the Trust might be classified as a partnership for U.S. federal income tax purposes. However, due to the uncertain treatment of digital assets, with respect to staking and including forks, airdrops and similar occurrences for U.S. federal income tax purposes, there can be no assurance in this regard. If the Trust were classified as a partnership for U.S. federal income tax purposes, the tax consequences of owning Shares generally would not be materially different from the tax consequences described herein, although there might be certain differences, including with respect to timing. In addition, tax information reports provided to beneficial owners of Shares would be made in a different form. If the Trust were not classified as either a grantor trust or a partnership for U.S. federal income tax purposes, it would be classified as a corporation for such purposes. In that event, the Trust would be subject to entity-level U.S. federal income tax (currently at the rate of
In accordance with U.S. GAAP, the Trust has defined the threshold for recognizing the benefits of tax positions in the financial statements as “more-likely-than-not” to be sustained by the applicable taxing authority and requires measurement of a tax position meeting the “more-likely-than-not” threshold, based on the largest benefit that is more than 50% likely to be realized. Tax positions deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit in the current period. As of, and during the periods ended September 30, 2026 and December 31, 2025, the Trust did
The Sponsor of the Trust has evaluated whether or not there are uncertain tax positions that require financial statement recognition and has determined that no reserves for uncertain tax positions related to federal, state and local income taxes existed as of September 30, 2026 or December 31, 2025.
11
7. Related Parties
The Trust considered the following entities, their directors, and certain employees to be related parties of the Trust as of September 30, 2026: DCG, GSO, GSIS, and Grayscale Securities, LLC. As of September 30, 2026 and December 31, 2025,
In accordance with the Trust Agreement governing the Trust, the Trust pays a fee to the Sponsor, calculated as
Pursuant to the Staking Arrangements, the Custodian and the applicable Staking Provider are entitled to receive a portion of the gross staking rewards generated thereunder, representing the Validator Fees, with the remaining staking rewards received by the Trust. The Sponsor is entitled to receive a fee equal to a portion of the staking rewards, payable in Ether, which accrues daily in U.S. dollars and is calculated as a per annum percentage of the staking rewards received by the Trust, as directed by the Sponsor in its sole discretion (the “Sponsor’s Staking Fee”). The Sponsor’s Staking Fee is payable daily in arrears. The Sponsor’s Staking Fee and the Validator Fees together represent an aggregate of
As partial consideration for receipt of the Sponsor’s Fee, the Sponsor is obligated under the Trust Agreement to assume and pay all fees and other expenses incurred by the Trust in the ordinary course of its affairs, excluding taxes, but including marketing fees; administrator fees, if any; custodian fees; transfer agent fees; trustee fees; the fees and expenses related to the listing, quotation or trading of the Shares on any secondary market (including customary legal, marketing and audit fees and expenses) in an amount up to $
The Trust may incur certain extraordinary, non-recurring expenses that are not Sponsor-paid Expenses, including, but not limited to, taxes and governmental charges, expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Trust to protect the Trust or the interests of shareholders, any indemnification of the Custodian or other agents, service providers or counterparties of the Trust, the fees and expenses related to the listing, quotation or trading of the Shares on any secondary market (including legal, marketing and audit fees and expenses) to the extent exceeding $
The Sponsor, from time to time, may temporarily waive all or a portion of the Sponsor’s Fee of the Trust in its discretion for stated periods of time. Effective July 23, 2024, the Sponsor determined to waive a portion of the Sponsor’s Fee for the first six months of the Trust’s operation, so that the fee was
For the three months ended September 30, 2026 and 2025, the Trust incurred Sponsor’s Fees of $
12
Sponsor’s Fees of $
For the three months ended September 30, 2026, the Trust incurred Sponsor’s Staking Fees of $
8. Concentration Risk
The Trust’s investment portfolio is concentrated in Ether, and its net asset value and results of operations are directly affected by the price of Ether, which has historically been highly volatile. As a result, the Trust may experience significant fluctuations in net asset value, including periods of substantial losses. This concentration also exposes the Trust to risks specific to Ether and its supporting infrastructure, including market liquidity constraints and operational or cybersecurity risks associated with the custody and transfer of Ether.
9. Financial Highlights Per Share Performance
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Per Share Data: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Principal Market NAV, beginning of period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Net increase (decrease) in net assets from investment operations: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net investment income (loss) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Net realized and unrealized gain (loss) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Net increase (decrease) in net assets resulting from operations |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Principal Market NAV, end of period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total return |
|
|
% |
|
|
% |
|
|
- |
% |
|
|
% |
|||
Ratios to average net assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net investment income (loss) |
|
|
% |
|
|
- |
% |
|
|
% |
|
|
- |
% |
||
Total expenses |
|
|
- |
% |
|
|
- |
% |
|
|
- |
% |
|
|
- |
% |
Net expenses after fees waived |
|
|
- |
% |
|
|
- |
% |
|
|
- |
% |
|
|
- |
% |
Ratios of net investment income (loss) and expenses to average net assets have been annualized.
An individual shareholder’s return, ratios, and per Share performance may vary from those presented above based on the timing of Share transactions. The amount shown for a Share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the number of Shares issued in creations occurring at an operational value derived from an operating metric as defined in the Trust Agreement.
Total return is calculated assuming an initial investment made at the Principal Market NAV at the beginning of the period and assuming redemption on the last day of the period.
10. Indemnifications
In the normal course of business, the Trust enters into certain contracts that provide a variety of indemnities, including contracts with the Sponsor and affiliates of the Sponsor, DCG and its officers, directors, employees, subsidiaries and affiliates, and the Custodian and Additional Custodian, as well as others relating to services provided to the Trust. The Trust’s maximum exposure under these and its other indemnities is unknown. However, no liabilities have arisen under these indemnities in the past and, while there can be no assurances in this regard, there is no expectation that any will occur in the future. Therefore, the Sponsor does not consider it necessary to record a liability in this regard.
13
11. Subsequent Events
On October 6, 2026, the Trust made a cash distribution (the “October Distribution”) to shareholders derived from Ether received as staking rewards under the Staking Arrangements. The October Distribution totaled $
On November 5, 2026, the Sponsor, on behalf of the Trust, and Grayscale Securities, LLC (the “Advertising Review and Filing Agent”), an affiliate of the Sponsor, entered into an advertising review and filing agent agreement (the “Advertising Review and Filing Agent Agreement”), pursuant to which, effective November 5, 2026, the Advertising Review and Filing Agent reviews and approves marketing materials for compliance with applicable SEC and Financial Industry Regulatory Authority, Inc. (“FINRA”) advertising rules, files applicable marketing materials with FINRA, and provides certain additional marketing-related services. The fees of the Advertising Review and Filing Agent under the Advertising Review and Filing Agent Agreement are paid on behalf of the Trust by the Sponsor.
Also on November 5, 2026, the Sponsor, on behalf of the Trust, and the Marketing Agent entered into Amendment No. 1 (the “Marketing Agent Amendment”) to the Marketing Agent Agreement, dated as of May 23, 2024 (as amended, the “Marketing Agent Agreement”). Pursuant to the Marketing Agent Amendment, effective November 5, 2026, the Marketing Agent no longer reviews marketing materials or files marketing materials with FINRA on behalf of the Trust. The Marketing Agent continues to provide its other services under the Marketing Agent Agreement, including working with the Transfer Agent to review and approve orders placed by Authorized Participants for the creation or redemption of Baskets.
The Sponsor has evaluated all subsequent events through the issuance of the financial statements and has noted no other events requiring adjustment or additional disclosure in the financial statements.
14
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 unaudited financial statements and related notes included elsewhere in this Report, which have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). Unless otherwise stated, the terms “we,” “our” and “us” in this Report refer to Grayscale Investments Sponsors, LLC (the “Sponsor”) acting on behalf of the Trust. Statements preceded by, followed by or that include words such as “may,” “might,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of these terms and other similar expressions are intended to identify some of the forward-looking statements. All statements (other than statements of historical fact) included in this Report that address activities, events or developments that will or may occur in the future, including such matters as changes in prices and market conditions (for Ether and the Shares), the operations of the Trust, the plans of the Sponsor and references to the Trust’s future success and other similar matters are forward-looking statements. These statements are only predictions. Actual events or results may differ materially. These statements are based upon certain assumptions and analyses made by the Sponsor on the basis of its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. Whether or not actual results and developments will conform to the Sponsor’s expectations and predictions is subject to a number of risks and uncertainties, including the special considerations discussed in this Report, general economic, market and business conditions, changes in laws or regulations, including those concerning taxes, made by governmental authorities or regulatory bodies, and other world economic and political developments. Consequently, all the forward-looking statements made in this Report are qualified by these cautionary statements, and there can be no assurance that the actual results or developments the Sponsor anticipates will be realized or, even if substantially realized, will result in the expected consequences to, or have the expected effects on, the Trust’s operations or the value of the Shares issued by the Trust. Moreover, neither the Sponsor nor any other person assumes responsibility for the accuracy or completeness of the forward-looking statements. Neither the Trust nor the Sponsor undertakes an obligation to publicly update or conform to actual results any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
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 Ethereum tokens (“Ether”), a type of digital asset based on an open-source cryptographic protocol, and, from time to time, issues blocks of 10,000 common units of fractional undivided beneficial interest in, and ownership of, the Trust (each such unit, a “Share,” and collectively, the “Shares”; each such block, a “Basket”) to certain eligible financial institutions that are registered broker-dealers, have entered into agreements with the Trust and the Sponsor concerning the creation and redemption of Shares, and each own a digital wallet address that is known to the Custodian as belonging to the financial institution or a Liquidity Provider (each, an “Authorized Participant”) 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 July 18, 2024 and the effectiveness of the registration statement on Form S-1, the Sponsor authorized the commencement of a redemption program. Shares of the Trust began trading on NYSE Arca, Inc. (“NYSE Arca”) on July 23, 2024, following the effectiveness of the Trust’s registration statement on Form S-1. 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 (as defined below), determined by reference to the U.S. dollar value of a Ether derived from the digital asset trading platforms reflected in the CoinDesk Ether Benchmark Rate (the “Index”), calculated at 4:00 p.m., New York time, on each business day (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.
Prior to April 1, 2026, the Trust valued the Ether held by the Trust for operational purposes by reference to the CoinDesk Ether Price Index (ETX), which constituted the Index. From and after April 1, 2026, the Index is the CoinDesk Ether Benchmark Rate which is used to calculate the Trust’s non-GAAP net asset value (“NAV”) and NAV per Share. NAV is the aggregate value, expressed in U.S. dollars, of the Trust’s assets (other than U.S. dollars or other fiat currency), less its liabilities (which include estimated accrued but unpaid fees and expenses); NAV per Share is NAV divided by the number of Shares outstanding. Prior to April 1, 2026, references to the “Index” in the Trust’s filings with the SEC, including this Report on Form 10-Q, refer to the CoinDesk Ether Price Index (ETX). From and after April 1, 2026, references to the “Index” in the Trust’s filings with the SEC are to the CoinDesk Ether Benchmark Rate.
15
Staking
On October 6, 2025, the Trust began using, or permitting to be used, a portion of its Ether in the Ethereum Network’s proof-of-stake validation protocol (“Staking”) pursuant to staking arrangements with Coinbase Custody Trust Company, LLC (the “Custodian”) and certain third-party staking providers and earns consideration in exchange for Staking, currently in the form of additional Ether (“Staking Consideration”). The amount of Staking Consideration received by the Trust is influenced by factors including Ethereum Network conditions, protocol-level reward rates, and the portion of the Trust’s Ether that is staked, and the Trust does not expect Staking Consideration to be earned at a consistent rate. Staking also introduces operational and liquidity considerations, including that staked Ether may be inaccessible for a period of time required to un-stake and withdraw Ether under Ethereum Network protocols and the Trust’s dependence on third-party staking providers for the execution of staking activities.
Pursuant to the Trust’s staking arrangements and the Trust’s Third Amended and Restated Declaration of Trust and Trust Agreement, as amended (the “Trust Agreement”), a portion of gross Staking Consideration is allocated to the Custodian and the applicable staking providers. A separate portion payable to the Sponsor for facilitating Staking accrues daily in U.S. dollars, is calculated as a per annum percentage of Staking Consideration received by the Trust and is payable in Ether daily in arrears (the “Sponsor’s Staking Fee”). As of the date of this Report, the Sponsor’s Staking Fee, the Custodian’s fee and the applicable staking providers’ share comprise an aggregate of 6% of gross Staking Consideration generated under the Trust’s staking arrangements, with the remainder retained by the Trust. Staking Consideration retained by the Trust increases the Trust’s Ether holdings, while distributions or sales of Ether reduce the Trust’s Ether holdings. The Trust is required under the Trust Agreement to convert Staking Consideration held by the Trust to cash no less often than quarterly and promptly distribute the cash proceeds, net of the Sponsor’s Staking Fee and other applicable Trust expenses, to shareholders. The Trust currently intends to make such distributions on a monthly, but no less than quarterly, basis. The amount of future distributions will depend on the Staking Consideration received by the Trust and applicable deductions and therefore cannot be predicted with certainty.
Critical Accounting Policies and Estimates
Investment Transactions and Revenue Recognition
The Trust considers investment transactions to be the receipt of Ether by the Trust in connection with Share creations and the delivery of Ether by the Trust in connection with Share redemptions or for payment of expenses in Ether. 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 transfers of Ether to satisfy the Trust’s obligation to pay the Sponsor a fee that accrues daily in U.S. dollars at an annual rate of 0.15% of the aggregate value of the Trust’s assets, less its liabilities, as calculated and published by the Sponsor, and is payable in Ether daily in arrears (the “Sponsor’s Fee”).
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 net asset value in accordance with U.S. GAAP (“Principal Market NAV”), the Trust follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820-10, Fair Value Measurement, which outlines the application of fair value accounting. ASC 820-10 determines fair value to be the price that would be received for Ether 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 Ether 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.
For purposes of this Report, a “Digital Asset Market” is a Brokered Market, Dealer Market, Principal-to-Principal Market or Exchange Market, each as defined in the FASB ASC Master Glossary. An Exchange Market is referred to as a “Trading Platform Market” in this Report.
The Trust receives Ether only in connection with a creation order from an Authorized Participant or an unaffiliated service provider that facilitates the purchase or sale of Ether in connection with creations or redemptions of Baskets (a “Liquidity Provider”) and does not itself transact on any Digital Asset Markets. Therefore, the Trust looks to market-based volume and level of activity for Digital Asset Markets. Authorized Participants and Liquidity Providers may transact in Digital Asset Markets.
In determining which of the eligible Digital Asset Markets is the Trust’s principal market, the Trust reviews these criteria in the following order:
16
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.
Investment Company Considerations
The Trust is an investment company for U.S. 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 Ether 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. U.S. 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 (unaudited)
Financial Highlights for the Three and Nine Months Ended September 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)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net realized and unrealized gain (loss) |
|
$ |
934,288 |
|
|
$ |
932,923 |
|
|
$ |
(220,926 |
) |
|
$ |
544,923 |
|
Net increase (decrease) in net assets resulting from operations |
|
$ |
943,082 |
|
|
$ |
931,931 |
|
|
$ |
(197,148 |
) |
|
$ |
543,202 |
|
Net assets(1) |
|
$ |
2,481,190 |
|
|
$ |
3,001,975 |
|
|
$ |
2,481,190 |
|
|
$ |
3,001,975 |
|
Net realized and unrealized gain for the three months ended September 30, 2026 was $934,288, which includes a realized loss of ($50,208) on the sale of Ether to meet redemptions, a realized loss of ($427) on the transfer of Ether to pay expenses, a realized loss of ($929) on the sale of Ether for distributions to shareholders, and net change in unrealized appreciation/depreciation of $985,852. Net realized and unrealized gain for the period was driven by Ether price appreciation from $1,578.53 per Ether as of June 30, 2026, to $2,668.26 per Ether as of September 30, 2026. Net increase in net assets resulting from operations was $943,082 for the three months ended September 30, 2026, which consisted of the net realized and unrealized gain, and the net investment income of $8,794. Net assets increased to $2,481,190 at September 30, 2026, an 84% increase for the three-month period. The increase in net assets resulted from the aforementioned Ether price appreciation, the contribution of approximately 135,501 Ether with a value of $336,297 to the Trust in connection with Share creations during the period and the contribution of approximately 4,564 Ether with a value of $9,809 in connection with Staking Rewards, partially offset by the redemption of approximately 62,934 Ether with a value of $144,007 from the Trust, the sale of approximately 1,363 Ether with a value of $3,259 from the Trust for distributions to shareholders, the withdrawal of approximately 328 Ether to pay the foregoing Sponsor’s Fee, the withdrawal of approximately 140 Ether to pay the foregoing Sponsor’s Staking Fee and the payable of approximately 1 Ether to pay the foregoing Sponsor’s Staking Fee.
17
Net realized and unrealized gain for the three months ended September 30, 2025 was $932,923, which includes a realized loss of ($66,728) on the sale of Ether to meet redemptions, a realized loss of ($152) on the transfer of Ether to pay expenses, and net change in unrealized appreciation/depreciation of $866,043. Net realized and unrealized gain for the period was driven by Ether price appreciation from $2,516.23 per Ether as of June 30, 2025, to $4,161.61 per Ether as of September 30, 2025. Net increase in net assets resulting from operations was $931,931 for the three months ended September 30, 2025, which consisted of the net realized and unrealized gain, and the net investment loss of ($992). Net assets increased to $3,001,975 at September 30, 2025, a 126% increase for the three-month period. The increase in net assets resulted from the aforementioned Ether price appreciation and the contribution of approximately 285,004 Ether with a value of $1,115,426 to the Trust in connection with Share creations during the period, partially offset by the redemption of approximately 92,076 Ether with a value of $375,638 from the Trust, and the withdrawal of approximately 249 Ether to pay the foregoing Sponsor’s Fee.
Net realized and unrealized loss for the nine months ended September 30, 2026 was ($220,926), which includes a realized loss of ($227,004) on the sale of Ether to meet redemptions, a realized loss of ($1,327) on the transfer of Ether to pay expenses, a realized loss of ($929) on the sale of Ether for distributions to shareholders, and net change in unrealized appreciation/depreciation of $8,334. Net realized and unrealized loss for the period was driven by Ether price depreciation from $2,971.94 per Ether as of December 31, 2025, to $2,668.26 per Ether as of September 30, 2026. Net decrease in net assets resulting from operations was ($197,148) for the nine months ended September 30, 2026, which consisted of the net realized and unrealized loss, and the net investment income of $23,778. Net assets increased to $2,481,190 at September 30, 2026, a 14% increase for the nine-month period. The increase in net assets resulted from the contribution of approximately 416,673 Ether with a value of $1,014,138 to the Trust in connection with Share creations during the period and the contribution of approximately 12,212 Ether with a value of $26,705 in connection with Staking Rewards, partially offset by the aforementioned Ether price depreciation, the redemption of approximately 230,213 Ether with a value of $513,696 from the Trust, the sale of approximately 1,363 Ether with a value of $3,259 from the Trust for distributions to shareholders, the withdrawal of approximately 957 Ether to pay the foregoing Sponsor’s Fee, the withdrawal of approximately 454 Ether to pay the foregoing Sponsor’s Staking Fee and the payable of approximately 1 Ether to pay the foregoing Sponsor’s Staking Fee.
Net realized and unrealized gain for the nine months ended September 30, 2025 was $544,923, which includes a realized loss of ($158) on the transfer of Ether to pay expenses, a realized gain of $25,468 on the sale of Ether to meet redemptions and net change in unrealized appreciation/depreciation of $519,613. Net realized and unrealized gain for the period was driven by Ether price appreciation from $3,340.40 per Ether as of December 31, 2024, to $4,161.61 per Ether as of September 30, 2025. Net increase in net assets resulting from operations was $543,202 for the nine months ended September 30, 2025, which consisted of the net realized and unrealized gain, and the net investment loss of ($1,721). Net assets increased to $3,001,975 at September 30, 2025, a 91% increase for the nine-month period. The increase in net assets resulted from the aforementioned Ether price appreciation and the contribution of approximately 391,068 Ether with a value of $1,380,889 to the Trust in connection with Share creations during the period, partially offset by the redemption of approximately 140,031 Ether with a value of $495,030 from the Trust, and the withdrawal of approximately 564 Ether to pay the foregoing Sponsor’s Fee.
Cash Resources and Liquidity
The Trust receives and holds cash only to facilitate (i) creation or redemption orders effected through cash transactions (“Cash Orders”) and (ii) distributions to shareholders related to staking activities, and otherwise has not had or maintained a cash balance since the commencement of operations. When selling Ether in the Digital Asset Market on behalf of the Trust to pay expenses incurred by the Trust in addition to the Sponsor’s Fee that the Sponsor is not obligated to assume, the Sponsor endeavors to sell the exact amount of Ether needed to pay expenses in order to minimize the Trust’s holdings of assets other than Ether. In addition, upon the consummation or deemed failure of a Cash Order to create or redeem Baskets, the Trust will promptly return any excess cash it continues to hold with respect to such Cash Order to the applicable counterparty. 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.
Generally, the Trust does not intend to hold cash, except in connection with Cash Orders for creations or redemptions of Baskets. Cash includes non-interest bearing non-restricted cash with one institution. Cash in a bank deposit account, at times, may exceed U.S. federally insured limits. The Trust has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk on such bank deposits.
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 expenses of the Trust during the periods covered by this Report were the Sponsor’s Fee and Sponsor’s Staking Fee.
The Sponsor, from time to time, may temporarily waive all or a portion of the Sponsor’s Fee of the Trust in its discretion for stated periods of time. Effective July 23, 2024, the Sponsor determined to waive a portion of the Sponsor’s Fee for the first six months of the Trust’s operation, so that the fee was 0% of the NAV of the Trust for the first $2.0 billion of the Trust’s assets. The six-month waiver expired on January 23, 2025, and the Sponsor’s Fee thereafter is 0.15%.
18
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
|
|
As of September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Price of Ether on principal market |
|
$ |
2,668.26 |
|
|
$ |
4,161.61 |
|
Principal Market NAV per Share(1) |
|
$ |
25.48 |
|
|
$ |
39.17 |
|
Principal Market NAV(1) |
|
$ |
2,481,189,770 |
|
|
$ |
3,001,974,634 |
|
Index Price |
|
$ |
2,668.34 |
|
|
$ |
4,161.97 |
|
NAV per Share(2) |
|
$ |
25.48 |
|
|
$ |
39.18 |
|
NAV(2) |
|
$ |
2,481,264,161 |
|
|
$ |
3,002,234,320 |
|
The Trust reflects creations and redemptions and the Ether for proceeds receivable or payable with respect to such creations and redemptions, respectively, on the trade date, which is the business day an accepted creation or redemption order is placed 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.
Historical NAV and Ether Prices
As movements in the price of Ether will directly affect the price of the Shares, investors should understand recent movements in the price of Ether. Investors, however, should also be aware that past movements in the Ether 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.
19
The following chart illustrates the movement in the Trust’s NAV per Share (as adjusted for the Reverse Share Split for periods prior to November 20, 2024) versus the Index Price and the Trust’s Principal Market NAV per Share (as adjusted for the Reverse Share Split for periods prior to November 20, 2024) from July 23, 2024 (the commencement of the Trust’s operations) to September 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.
20
The following table illustrates the movements in the Index Price from July 23, 2024 (the commencement of the Trust’s operations) to September 30, 2026. The Sponsor has not observed a material difference between the Index Price and average prices from the Constituent Trading Platforms as of September 30, 2026, individually or as a group.
|
|
|
|
|
High |
|
Low |
|
|
|
|
|
|
|||||||||||
Period |
|
Average |
|
|
Index Price |
|
|
Date |
|
Index Price |
|
|
Date |
|
End of period |
|
|
Last business day |
|
|||||
July 23, 2024 (the commencement of the Trust’s operations) to September 30, 2024 |
|
$ |
2,650.95 |
|
|
$ |
3,456.85 |
|
|
7/23/2024 |
|
$ |
2,221.82 |
|
|
9/6/2024 |
|
$ |
2,592.73 |
|
|
$ |
2,592.73 |
|
Twelve months ended September 30, 2025 |
|
$ |
2,974.04 |
|
|
$ |
4,832.59 |
|
|
8/22/2025 |
|
$ |
1,465.07 |
|
|
4/8/2025 |
|
$ |
4,161.97 |
|
|
$ |
4,161.97 |
|
Twelve months ended September 30, 2026 |
|
$ |
2,517.60 |
|
|
$ |
4,726.62 |
|
|
10/6/2025 |
|
$ |
1,553.95 |
|
|
6/6/2026 |
|
$ |
2,668.34 |
|
|
$ |
2,668.34 |
|
July 23, 2024 (the commencement of the Trust’s operations) to September 30, 2026 |
|
$ |
2,737.52 |
|
|
$ |
4,832.59 |
|
|
8/22/2025 |
|
$ |
1,465.07 |
|
|
4/8/2025 |
|
$ |
2,668.34 |
|
|
$ |
2,668.34 |
|
The following table illustrates the movements in the Digital Asset Market price of Ether, as reported on the Trust’s principal market, from July 23, 2024 (the commencement of the Trust’s operations) to September 30, 2026.
|
|
|
|
|
High |
|
Low |
|
|
|
|
|
|
|||||||||||
Period |
|
Average |
|
|
Digital Asset Market Price |
|
|
Date |
|
Digital Asset Market Price |
|
|
Date |
|
End of period |
|
|
Last business day |
|
|||||
July 23, 2024 (the commencement of the Trust’s operations) to September 30, 2024 |
|
$ |
2,650.90 |
|
|
$ |
3,458.99 |
|
|
7/23/2024 |
|
$ |
2,220.15 |
|
|
9/6/2024 |
|
$ |
2,594.43 |
|
|
$ |
2,594.43 |
|
Twelve months ended September 30, 2025 |
|
$ |
2,974.06 |
|
|
$ |
4,833.89 |
|
|
8/22/2025 |
|
$ |
1,465.40 |
|
|
4/8/2025 |
|
$ |
4,161.61 |
|
|
$ |
4,161.61 |
|
Twelve months ended September 30, 2026 |
|
$ |
2,517.86 |
|
|
$ |
4,726.40 |
|
|
10/6/2025 |
|
$ |
1,554.17 |
|
|
6/6/2026 |
|
$ |
2,668.26 |
|
|
$ |
2,668.26 |
|
July 23, 2024 (the commencement of the Trust’s operations) to September 30, 2026 |
|
$ |
2,737.64 |
|
|
$ |
4,833.89 |
|
|
8/22/2025 |
|
$ |
1,465.40 |
|
|
4/8/2025 |
|
$ |
2,668.26 |
|
|
$ |
2,668.26 |
|
21
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 (the commencement of the Trust’s operations) to September 30, 2026.
ETH Premium/(Discount): ETH Share Price vs. NAV per Share (Non-GAAP) ($)
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 (the commencement of the Trust’s operations) to September 30, 2026.
ETH Premium/(Discount): ETH Share Price vs. NAV per Share (Non-GAAP) (%)
22
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Third Amended and Restated Declaration of Trust and Trust Agreement, dated as of August 6, 2026, between the Trustee and the Sponsor establishing and governing the operations of the Trust, as may be further amended from time to time (the “Trust Agreement”), does not authorize the Trust to borrow for payment of the Trust’s ordinary expenses. The Trust does not engage in transactions in foreign currencies which could expose the Trust or holders of Shares to any foreign currency related market risk. The Trust does not invest in derivative financial instruments and has no foreign operations or long-term debt instruments.
Item 4. Controls and Procedures
The Trust maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Principal Executive Officer and Principal Financial and Accounting Officer of the Sponsor, and to the audit committee of the Sponsor, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of the Principal Executive Officer and the Principal Financial and Accounting Officer of the Sponsor, the Sponsor conducted an evaluation of the Trust’s disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e). Based on this evaluation, the Principal Executive Officer and the Principal Financial and Accounting Officer of the Sponsor concluded that the Trust’s disclosure controls and procedures were effective as of the end of the period covered by this report.
Changes in Internal Control Over Financial Reporting
There was no change in the Trust’s internal controls over financial reporting that occurred during the Trust’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, these internal controls.
23
PART II – OTHER INFORMATION:
Item 1. Legal Proceedings
There have been no material changes to the Legal Proceedings last reported under “Part I, Item 3. Legal Proceedings” of our Annual Report on Form 10-K for the year ended December 31, 2025 (our “Annual Report”).
Item 1A. Risk Factors
Except for the risk factors disclosed in Item 8.01/Exhibit 99.2 of the Trust’s Current Report on Form 8-K filed on July 17, 2026, there have been no material changes to the Risk Factors last reported under “Part I, Item 1A. Risk Factors” of our Annual Report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Although the Trust does not purchase Shares directly from its shareholders, in connection with its redemption of Baskets from Authorized Participants during the three months ended September 30, 2026, the Trust redeemed the following Shares:
Period |
|
Total Number of Shares of ETH Redeemed |
|
|
Average Price Paid per Share of ETH(1) |
|
||
July 1, 2026 - July 31, 2026 |
|
|
2,450,000 |
|
|
$ |
16.67 |
|
August 1, 2026 - August 31, 2026 |
|
|
110,000 |
|
|
$ |
17.79 |
|
September 1, 2026 - September 30, 2026 |
|
|
4,040,000 |
|
|
$ |
25.05 |
|
Total |
|
|
6,600,000 |
|
|
$ |
21.82 |
|
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5.
None.
24
Item 6. Exhibits
Exhibit Number |
Exhibit Description |
10.1 |
Marketing Agent Agreement, dated May 23, 2024, between the Sponsor and the Marketing Agent (incorporated by reference to Exhibit 10.5 of the Registration Statement on Form S-1 filed by the Registrant on July 18, 2024). |
|
|
10.2† |
Amendment No. 1 to the Marketing Agent Agreement, dated as of November 5, 2026, between the Sponsor and Foreside Fund Services, LLC. |
|
|
10.3†
|
Advertising Review and Filing Agent Agreement, dated as of November 5, 2026, by and between each entity listed on Appendix I thereto, Grayscale Investments Sponsors, LLC, and Grayscale Securities, LLC. |
|
|
31.1 |
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended, with respect to the Trust’s Report on Form 10-Q for the quarter ended September 30, 2026. |
|
|
31.2 |
Certification of Principal Financial and Accounting Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended, with respect to the Trust’s Report on Form 10-Q for the quarter ended September 30, 2026. |
|
|
32.1 |
Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to the Trust’s Report on Form 10-Q for the quarter ended September 30, 2026. |
|
|
32.2 |
Certification of Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to the Trust’s Report on Form 10-Q for the quarter ended September 30, 2026. |
|
|
101.INS* |
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
|
|
101.SCH* |
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents. |
|
|
104 |
Cover Page Interactive Data File—The cover page interactive data file does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. |
†
* |
Portions of this exhibit (indicated by asterisks) have been omitted as the Registrant has determined that (i) the omitted information is not material and (ii) the omitted information is of the type that the Registrant treats as private or confidential. Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections. |
25
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned in the capacities* indicated, thereunto duly authorized.
|
|
Grayscale Investments Sponsors, LLC as Sponsor of Grayscale Ethereum Staking Mini ETF |
||
|
|
|
|
|
|
|
By: |
/s/ Peter Mintzberg |
|
|
|
|
Name: |
Peter Mintzberg |
|
|
|
Title: |
Chief Executive Officer (Principal Executive Officer)* |
|
|
|
|
|
|
|
|
|
|
|
|
By: |
/s/ Kathryn Masci |
|
|
|
|
Name: |
Kathryn Masci |
|
|
|
Title: |
Interim Chief Financial Officer (Principal Financial and Accounting Officer)* |
|
|
|
|
|
|
|
|
|
|
Date: November 5, 2026
* The Registrant is a trust and the persons are signing in their capacities as officers of Grayscale Investments Sponsors, LLC, the Sponsor of the Registrant.
26