10-Q: 21Shares Core Ethereum ETF Reports Significant Asset Decrease in Q1 2025 Amidst Ether Price Decline

21Shares Core Ethereum ETF's net asset value decreased significantly in Q1 2025 due to a decline in ether prices and a decrease in outstanding shares.

Summary

• 21Shares Core Ethereum ETF reported its financial results for the quarter ended March 31, 2025.
• The ETF's net asset value decreased from $16,869,879 on December 31, 2024, to $8,403,421 on March 31, 2025.
• This decrease was primarily driven by a decline in the price of ether from $3,340.57 to $1,827.55 during the quarter.
• The number of outstanding shares also decreased by 90,000 due to share creation and redemption activity.
• The net decrease in net assets resulting from operations was $9,861,010, including unrealized losses on ether investments and realized losses from ether sold for redemptions.
• The Sponsor Fee, after waivers, was $5,907 for the quarter.
• The ETF's investment objective is to track the performance of ether as measured by the CME CF Ether-Dollar Reference Rate New York Variant.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the significant decrease in net asset value and the losses incurred during the quarter. The ETF's performance is heavily reliant on the volatile price of ether.

Positives

• The Sponsor covered most of the operating expenses of the Trust through the Sponsor Fee.
• The ETF continues to operate in accordance with its investment objective to track the performance of ether.
• The ETF has disclosure controls and procedures in place.

Negatives

• The ETF experienced a significant decrease in net asset value due to the decline in ether prices.
• The ETF experienced a net realized loss on investment in ether sold for redemptions of $3,476,102.
• The ETF experienced a net change in unrealized depreciation on investment in ether of $6,380,524.

Risks

• The ETF is highly concentrated in a single asset (ether), making it vulnerable to market risks associated with ether and digital assets.
• The ETF's performance is directly tied to the price of ether, which can be volatile.
• Forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially.

Future Outlook

The report contains forward-looking statements that are subject to risks and uncertainties, and actual results could differ materially.

Industry Context

The performance of the ETF is directly correlated to the price movements of ether, reflecting the broader trends in the cryptocurrency market.

Comparison to Industry Standards

• The 21Shares Core Ethereum ETF is designed to track the performance of ether, similar to other Ethereum ETFs in the market.
• Its performance is comparable to other Ethereum ETFs, with variations due to expense ratios and tracking methodologies.
• Competitors include Grayscale Ethereum Trust (ETHE) and other similar investment products.

Related Party Transactions

• The Sponsor, 21Shares US LLC, is a related party to the Trust.
• The Sponsor receives a Sponsor Fee for its services.
• The Sponsor owned 20,000 Shares of the Trust as of March 31, 2025.

Stakeholder Impact

• Shareholders experienced a decrease in the value of their investment due to the decline in ether prices.
• Authorized Participants were involved in share creation and redemption activities.
• The Sponsor continues to manage the Trust and cover most of its operating expenses.

Key Dates

Keywords

Ethereum ETF, Ether, 21Shares, ETF, CETH, Digital Assets, Cryptocurrency, Financial Results