Bitwise Ethereum ETF Reports Significant Asset Decline and Losses in Q1 2025

Bitwise Ethereum ETF has reported significant financial changes in its first quarter of 2025, reflecting a challenging market environment for cryptocurrency assets. As of March 31, 2025, the Trust's total assets amounted to $173.8 million, a decrease from $404.5 million at the end of the previous fiscal period. This decline is primarily attributed to a substantial drop in the fair value of its investment in ether, which fell from $404.5 million to $173.8 million, driven by a decrease in the price of ether from $3,340.40 to $1,827.33 during the quarter.

The Trust's operations for the three months ended March 31, 2025, resulted in a net investment loss of $93,000, alongside a net realized and unrealized loss of approximately $149.8 million. This loss includes a net realized loss of $13.6 million on ether sold for redemptions and a net change in unrealized depreciation of $136.2 million. The net decrease in net assets from operations was approximately $149.9 million, contributing to a total decrease in net assets of $230.8 million for the quarter. The net asset value (NAV) per share also saw a significant decline, dropping from $23.96 to $13.10, representing a total return of -45.33%.

In terms of operational metrics, the Trust's ether holdings decreased from 121,101.9 ether to 95,108.4 ether during the quarter. The number of shares outstanding also fell significantly, from 16.9 million to 13.3 million, as the Trust experienced redemptions of 4.7 million shares. The Trust issued 1.1 million new shares during the same period, indicating some continued interest despite the overall decline in asset value. The Sponsor Fee, which is 0.20% per annum of the Trust’s ether holdings, was partially waived for the first $500 million of assets until January 22, 2025, but has since been accruing.

Looking ahead, the Trust's management has indicated that it does not foresee any immediate changes to its liquidity needs, despite the volatility in the cryptocurrency market. The Trust remains focused on providing exposure to ether while managing its operational expenses through the Sponsor's commitment to cover normal operating costs. However, the concentration risk associated with holding primarily ether assets remains a significant factor, as fluctuations in ether prices could materially impact the Trust's performance and the value of its shares. The Trust's future performance will largely depend on market conditions and the price trajectory of ether.