Fidelity Ethereum Fund's Net Assets Double Amid Ether Price Surge

TL;DR

**FETH is crushing it, doubling net assets and riding the ether wave – buy the dip if you're not already in!**

AI Summary

Fidelity Ethereum Fund (FETH) reported a significant increase in net assets and investment in ether for the nine months ended September 30, 2025. Total Net Assets surged to $3,154,185,000 from $1,572,626,000 at December 31, 2024, representing a 100.57% increase. The fair value of investment in ether more than doubled to $3,154,847,000 from $1,572,626,000 over the same period. The fund experienced a net increase in net assets from operations of $454,831,000 for the nine months ended September 30, 2025, a substantial improvement from a net decrease of $59,011,000 in the prior year period. This was primarily driven by a net change in unrealized appreciation on investment in ether of $882,139,000 in 2025, compared to a depreciation of $56,915,000 in 2024. Shares issued increased by 104,300,000 for the nine months ended September 30, 2025, while shares redeemed totaled 74,975,000, leading to a net increase of 29,325,000 shares outstanding. The Net Asset Value per share rose to $41.23 as of September 30, 2025, from $33.34 at December 31, 2024.

Why It Matters

This robust growth in Fidelity Ethereum Fund's net assets and NAV per share signals strong investor confidence and increasing institutional adoption of Ethereum, a key cryptocurrency. For investors, this indicates potential for continued capital appreciation in the digital asset space, especially within regulated investment vehicles. Employees of Fidelity benefit from the success of their product offerings, while customers gain access to a more liquid and potentially stable way to invest in ether. The broader market sees this as a positive indicator for the maturation of the crypto ETF ecosystem, intensifying competition among fund providers like BlackRock and Grayscale, and potentially paving the way for more digital asset-backed financial products.

Risk Assessment

Risk Level: medium — While the fund shows strong growth, its primary asset, ether, is subject to significant market volatility, as evidenced by the $56,915,000 net change in unrealized depreciation in 2024. The fund's performance is directly tied to the highly speculative digital asset market, which can experience rapid and unpredictable price swings. Furthermore, the fund incurred a net realized loss on investment in ether sold for redemptions of $423,594,000 for the nine months ended September 30, 2025, indicating exposure to market downturns during periods of outflows.

Analyst Insight

Investors should consider FETH as a strategic allocation for diversified exposure to the digital asset market, specifically Ethereum. Given the significant unrealized appreciation of $882,139,000, current holders might consider rebalancing if their portfolio is over-allocated to crypto. New investors should conduct due diligence on Ethereum's long-term prospects and be prepared for continued volatility.

Financial Highlights

debt To Equity

0.00

revenue

$0

operating Margin

N/A

total Assets

$3,154.85M

total Debt

$0.66M

net Income

$454.83M

eps

$41.23

gross Margin

N/A

cash Position

$0

revenue Growth

N/A

Key Numbers

• $3.15B — Total Net Assets (Increased by 100.57% from $1.57B at December 31, 2024, reflecting strong growth.)
• $41.23 — Net Asset Value per share (Increased from $33.34 at December 31, 2024, indicating share value appreciation.)
• $454.83M — Net Increase in Net Assets from Operations (Significant improvement from a $59.01M decrease in the prior year period, driven by unrealized gains.)
• $882.14M — Net change in unrealized appreciation on investment in ether (Key driver of positive operational results for the nine months ended September 30, 2025.)
• 76,500,000 — Shares outstanding (As of September 30, 2025, up from 47,175,000 at December 31, 2024, indicating increased investor participation.)
• $3.06M — Sponsor fee (Total expenses for the nine months ended September 30, 2025, reflecting operational costs.)
• $423.59M — Net realized loss on investment in ether sold for redemptions (For the nine months ended September 30, 2025, highlighting market volatility and redemption impact.)

Key Players & Entities

• Fidelity Ethereum Fund (company) — Registrant and investment vehicle
• FD Funds Management LLC (company) — Sponsor of the Trust
• FMR LLC (company) — Parent company of the Sponsor
• Cboe BZX Exchange, Inc (company) — Exchange where FETH shares are traded
• SEC (regulator) — Securities and Exchange Commission
• CSC Delaware Trust Company (company) — Trustee of the Trust
• FMR Capital, Inc. (company) — Seed Capital Investor, an affiliate of the Sponsor
• Ethereum (other) — Underlying blockchain technology
• ether (other) — Native token of the Ethereum blockchain, the fund's primary investment

FAQ

Risk Factors

• Volatility of Ether Prices [high — market]: The fair value of the fund's investment in ether is subject to significant price fluctuations. For the nine months ended September 30, 2025, the net change in unrealized appreciation was $882,139,000, a substantial swing from a depreciation of $56,915,000 in the prior year period. This volatility directly impacts the fund's net assets and NAV per share.
• Realized Losses on Redemptions [medium — market]: The fund experienced net realized losses on investment in ether sold for redemptions totaling $423,594,000 for the nine months ended September 30, 2025. This indicates that redemptions can force the sale of ether at prices lower than their cost basis, impacting overall returns.
• Sponsor Fees [low — operational]: The sponsor fee for the nine months ended September 30, 2025, was $3,057,000. While a portion was waived in the prior year, the full fee is now being recognized, representing an ongoing operational cost for the fund.
• Uncertain Regulatory Environment [high — regulatory]: As a fund investing in cryptocurrency, FETH is subject to evolving and uncertain regulatory frameworks globally. Changes in regulations could impact the fund's ability to operate, hold ether, or distribute shares, potentially affecting its value and accessibility.

Industry Context

The digital asset fund industry is experiencing rapid growth, driven by increasing institutional interest in cryptocurrencies like Ether. However, the sector remains highly sensitive to market volatility and evolving regulatory landscapes. Competitors are also launching similar products, intensifying the need for strong performance and clear risk management.

Regulatory Implications

The fund operates within a developing regulatory framework for digital assets. Potential changes in regulations concerning custody, trading, or taxation of cryptocurrencies could significantly impact the fund's operations, compliance costs, and investor accessibility.

What Investors Should Do

1. Monitor Ether Price Volatility
2. Assess Redemption Impact
3. Stay Informed on Regulatory Developments

Key Dates

• 2024-05-24: Fund Seeding Date — Marks the commencement of the fund's operations and investment activities.
• 2024-12-31: End of Fiscal Year 2024 — Provides a baseline for net assets and share count before the significant growth period in 2025.
• 2025-09-30: Quarterly Reporting Date — Shows substantial growth in net assets, NAV per share, and investment in ether, driven by unrealized appreciation.

Glossary

Investment in ether, at fair value

The value of the fund's holdings in the cryptocurrency Ether, determined by market prices. (This is the primary asset of the fund and its valuation directly drives the fund's Net Asset Value (NAV).)

Net realized gain (loss) on investment in ether sold for redemptions

The profit or loss incurred when the fund sells ether to meet investor redemption requests. (Indicates the impact of investor outflows on the fund's performance and its ability to manage its ether holdings during selling pressure.)

Net change in unrealized appreciation (depreciation) on investment in ether

The change in value of the fund's ether holdings that have not been sold, reflecting market price movements. (This is a key driver of the fund's operational results, showing the impact of ether's price performance on the fund's value.)

Net Asset Value per share (NAV)

The value of each share of the fund, calculated by dividing the total net assets by the number of outstanding shares. (Represents the per-share market value of the fund's holdings and is a key metric for investors to track performance.)

Sponsor fee

Fees paid to the entity that sponsors or manages the fund. (Represents an operational expense that impacts the fund's net income and performance.)

Year-Over-Year Comparison

The Fidelity Ethereum Fund has shown exceptional growth in the nine months ended September 30, 2025, with Total Net Assets more than doubling to $3.15 billion from $1.57 billion at the end of 2024. This surge is primarily attributed to a significant increase in the fair value of its ether holdings, resulting in a net increase in net assets from operations of $454.83 million, a stark contrast to a net decrease of $59.01 million in the prior year period. The Net Asset Value per share also rose substantially to $41.23 from $33.34, reflecting strong market performance of Ether and increased investor participation, as indicated by the rise in shares outstanding.

Key Financial Figures

• $ — (unaudited) (Amounts in 000's of US$, except for share and per share data)
• $500 — abilities may reflect amounts less than $500. The accompanying notes are an integr

Filing Documents

• ck0002000046-20250930.htm (10-Q) — 878KB
• ck0002000046-ex31_1.htm (EX-31.1) — 18KB
• ck0002000046-ex31_2.htm (EX-31.2) — 18KB
• ck0002000046-ex32_1.htm (EX-32.1) — 12KB
• ck0002000046-ex32_2.htm (EX-32.2) — 12KB
• img159160296_0.jpg (GRAPHIC) — 430KB
• img159160296_1.jpg (GRAPHIC) — 397KB
• 0001193125-25-271731.txt ( ) — 5209KB
• ck0002000046-20250930.xsd (EX-101.SCH) — 396KB
• ck0002000046-20250930_htm.xml (XML) — 396KB

Financial Statements

Financial Statements 2 2 3 4 5 Schedules of Investment as of September 30, 2025 (unaudited) and December 31, 2024 (unaudited) 6

Notes to Financial Statements (unaudited)

Notes to Financial Statements (unaudited) 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 13 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 19 Item 4.

Controls and Procedures

Controls and Procedures 19 PART II. OTHER INFORMATION 20 Item 1.

Legal Proceedings

Legal Proceedings 20 Item 1A.

Risk Factors

Risk Factors 20 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 20 Item 3. Defaults Upon Senior Securities 20 Item 4. Mine Safety Disclosures 20 Item 5. Other Information 20 Item 6. Exhibits 21

Signatures

Signatures 22 i CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q (this "Quarterly Report") contains "forward-looking statements" that generally relate to future events or future performance. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or the negative of these terms or other comparable terminology. All statements (other than statements of historical fact) included in this Quarterly Report that address activities, events or developments that will or may occur in the future, including such matters as movements in the digital asset markets and indexes that track such movements, Fidelity Ethereum Fund's ("the Trust's") operations, FD Funds Management LLC's ("the Sponsor's") plans 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 the Sponsor has made based on its perception of historical trends, current conditions and expected future developments, as well as other factors appropriate in the circumstances. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and are difficult to predict, that could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements including, without limitation, the risks, uncertainties and other factors we identify in this Quarterly Report and in our filings with the Securities and Exchange Commission (the "SEC"). Whether or not actual results and developments will conform to the Sponsor's expectations and predictions, however, is subject to a number of risks and uncertainties, including the special con

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements . Fidelity Ethereum Fund (unaudited) (Amounts in 000's of US$, except for share and per share data) September 30, 2025 December 31, 2024 Assets Investment in ether , at fair value (cost $ 2,240,553 and $ 1,540,471 as of September 30, 2025 and December 31, 2024, respectively) $ 3,154,847 $ 1,572,626 Receivables from issuance of capital shares — 31,796 Total Assets $ 3,154,847 $ 1,604,422 Liabilities Payable for purchases of ether — 31,796 Sponsor fee payable 662 — Total Liabilities $ 662 $ 31,796 Commitments and Contingencies (Note 6) Net Assets Shares, no par value ( unlimited shares authorized) 76,500,000 and 47,175,000 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively — — Paid-in-capital 2,708,469 1,581,741 Total distributable earnings (loss) 445,716 ( 9,115 ) Total Net Assets $ 3,154,185 $ 1,572,626 Net Asset Value per share ( 76,500,000 and 47,175,000 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively) $ 41.23 $ 33.34 Values shown as $— in the Statements of Assets and Liabilities may reflect amounts less than $500. The accompanying notes are an integral part of these financial statements 2 Fidelity Ethereum Fund (unaudited) (Amounts in 000's of US$) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Investment Income: Investment income $ — $ — $ — $ — Expenses: Sponsor fee 1,788 139 3,057 139 Total Expenses Before Waiver 1,788 139 3,057 139 Sponsor fee waived — ( 139 ) — ( 139 ) Net Expenses 1,788 — 3,057 — Net Investment Income (Loss) $ ( 1,788 ) $ — $ ( 3,057 ) $ — Net Realized and Change in Unrealized Gain (Loss) from: Net realized gain

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