21Shares Core Ethereum ETF reported a significant decline in its financial performance for the first quarter of 2025, as detailed in its latest 10-Q filing. The Trust's net asset value (NAV) decreased from $16.87 million at the end of 2024 to $8.40 million by March 31, 2025. This decline was primarily driven by a drop in the price of ether, which fell from $3,340.57 to $1,827.55 during the same period. The Trust also experienced a net decrease in net assets resulting from operations amounting to $9.86 million, attributed to a net change in unrealized losses on investments in ether and realized losses from ether sold for redemptions.
In terms of operational metrics, the Trust's outstanding shares decreased from 1.01 million to 920,000, reflecting a net reduction of 90,000 shares. During the quarter, the Trust issued 520,000 shares while redeeming 610,000. The total contributions from shares issued amounted to $7.07 million, while distributions for shares redeemed were $5.68 million. The Trust's investment in ether, which constitutes 100% of its net assets, was valued at $8.41 million as of March 31, 2025, down from $16.87 million at the end of the previous year.
The Trust's financial statements indicate that it incurred a net investment loss of $5,907 for the quarter, alongside a sponsor fee of $8,076, which was partially waived. The sponsor fee, which is set at 0.21% of the Trust's ether holdings, began to be collected after a six-month waiver period that ended on January 23, 2025. The Trust's management has indicated that it does not foresee any significant changes to its liquidity needs, as its only recurring expense is the sponsor fee.
Looking ahead, the Trust remains classified as an "emerging growth company," allowing it to take advantage of reduced public company reporting requirements. The management has expressed optimism about the Trust's future performance, although it acknowledges the inherent risks associated with the volatility of the digital asset markets. The Trust's investment strategy continues to focus on tracking the performance of ether, as measured by the CME CF Ether-Dollar Reference Rate, adjusted for expenses and liabilities.
About 21Shares Core Ethereum ETF
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