Invesco Galaxy Ethereum ETF Reports Financial Performance for Period Ending December 31, 2024

Invesco Galaxy Ethereum ETF, a Delaware statutory trust formed on September 27, 2023, reported its financial performance for the period ending December 31, 2024, in its recent 10-K filing. The Trust, which began trading on the Cboe BZX Inc. under the ticker symbol "QETH" on July 23, 2024, aims to reflect the performance of the spot price of ether, less expenses. As of December 31, 2024, the Trust's net assets totaled approximately $23.56 million, with a net asset value (NAV) per share of $33.28, down from $34.60 at the start of trading. The market value per share also decreased to $33.39, reflecting a total return of -3.50% for the period.

The Trust's financial results indicate a net income of $4.1 million, primarily driven by a net change in unrealized gains of $3.7 million and net realized gains of $0.4 million. The Trust incurred total expenses of $22,459, primarily attributed to the Sponsor's fee, which is set at 0.25% per annum of the daily total net assets. The Trust's operational structure allows it to sell ether to cover these expenses, which has implications for the amount of ether held per share, as the Trust's ether holdings will decline over time due to the accrual of fees and expenses.

In terms of strategic developments, the Trust has established relationships with various service providers, including Coinbase Custody Trust Company, which serves as the Ethereum Custodian, and the Bank of New York Mellon, which acts as the Administrator and Transfer Agent. The Trust's operational framework is designed to ensure the safekeeping of its ether holdings and the efficient execution of transactions. However, the Trust faces competition from other digital asset exchange-traded products (ETPs) and must navigate a rapidly evolving regulatory landscape that could impact its operations and market acceptance.

The filing also highlights the Trust's reliance on Authorized Participants for the creation and redemption of shares, which are conducted in blocks of 5,000 shares. As of January 31, 2025, the Trust had 44 holders of record. The Trust's ability to maintain liquidity and attract investment is contingent upon the active participation of these Authorized Participants, who may face challenges in volatile market conditions. The Trust's future performance will depend on various factors, including market conditions, regulatory developments, and the overall adoption of ether as a digital asset.