Franklin Ethereum Trust's Assets Soar 321% on Ether Appreciation

TL;DR

**EZET is crushing it, riding the ether wave to massive asset growth – buy the dip if you believe in crypto's future.**

AI Summary

Franklin Ethereum Trust (EZET) experienced significant growth in the six months ended September 30, 2025, with its investment in ether increasing from $21,614,322 at March 31, 2025, to $90,961,875. This surge was primarily driven by a net change in unrealized appreciation on investment in ether of $31,185,857 for the six-month period, alongside net realized gains of $2,907,325. Net assets grew substantially from $21,605,398 to $90,925,327, reflecting a robust increase in the value of its underlying ether holdings. The Trust issued 1,350,000 new shares, bringing total outstanding shares to 2,900,000, and saw its net asset value per share rise from $13.94 to $31.35. Operating expenses, primarily the Sponsor's fee, totaled $49,943 for the six months, resulting in a net investment loss of the same amount. The Trust continues to operate as an 'emerging growth company,' benefiting from reduced reporting requirements under the JOBS Act.

Why It Matters

This significant growth in Franklin Ethereum Trust's assets and NAV per share indicates strong investor interest and positive market sentiment for Ethereum, directly impacting investors holding EZET shares. The competitive landscape for crypto ETFs is intensifying, and EZET's performance positions it as a notable player, potentially attracting more capital from investors seeking exposure to ether without direct ownership complexities. For employees of Franklin Holdings, LLC, this success validates their strategic move into the digital asset space. Customers benefit from a liquid, regulated product offering exposure to a volatile asset class, while the broader market sees further institutionalization of cryptocurrency investments, potentially driving innovation and regulatory clarity.

Risk Assessment

Risk Level: medium — The Trust's primary asset is ether, which is subject to significant price volatility, as evidenced by the $31,185,857 net change in unrealized appreciation for the six months ended September 30, 2025, following a $6,777,145 net change in unrealized depreciation in the prior comparable period. While the current period shows strong gains, the inherent volatility of cryptocurrency markets presents a substantial risk to net asset value. Additionally, the Trust's status as an 'emerging growth company' means it benefits from reduced reporting requirements, which could imply less transparency compared to larger, more established public companies.

Analyst Insight

Investors should consider EZET as a vehicle for gaining exposure to Ethereum's price movements, but only as part of a diversified portfolio due to its inherent volatility. Monitor ether's market performance closely and be prepared for significant price swings. Given the substantial appreciation, investors might consider taking some profits if their risk tolerance is low, or holding if they anticipate continued growth in the ether market.

Financial Highlights

debt To Equity

0.00

revenue

$0

operating Margin

N/A

total Assets

$90,961,875

total Debt

$0

net Income

$34,043,239

eps

$16.06

gross Margin

N/A

cash Position

$0

revenue Growth

N/A

Key Numbers

• $90,961,875 — Investment in ether, fair value (Increased from $21,614,322 at March 31, 2025, representing a 321% increase.)
• $90,925,327 — Total Net Assets (Increased from $21,605,398 at March 31, 2025.)
• 2,900,000 — Shares issued and outstanding (Increased from 1,550,000 at March 31, 2025.)
• $31.35 — Net asset value per Share (Increased from $13.94 at March 31, 2025.)
• $34,043,239 — Net increase in net assets from operations (For the six months ended September 30, 2025, compared to a decrease of $6,971,976 in the prior year period.)
• $31,185,857 — Net change in unrealized appreciation on investment in ether (For the six months ended September 30, 2025.)
• $49,943 — Total expenses (Sponsor's fee) (For the six months ended September 30, 2025.)
• $59,957,569 — Proceeds from issuance of Shares (For the six months ended September 30, 2025.)

Key Players & Entities

• Franklin Ethereum Trust (company) — registrant and issuer of EZET shares
• Franklin Holdings, LLC (company) — Sponsor of the Trust and Fund
• Cboe BZX Exchange, Inc. (company) — exchange where EZET shares are listed
• Coinbase Custody Trust Company, LLC (company) — Ether Custodian for the Fund
• BNY Mellon Asset Servicing (company) — Administrator and Transfer Agent for the Fund
• SEC (regulator) — U.S. Securities and Exchange Commission
• JOBS Act (regulator) — legislation providing exemptions for emerging growth companies
• ether (dollar_amount) — primary investment asset of the Trust

FAQ

Risk Factors

• Volatility of Ether Prices [high — market]: The Trust's net assets are primarily composed of investments in ether. The fair value of ether can be highly volatile and subject to rapid and substantial price movements. For the six months ended September 30, 2025, the net change in unrealized appreciation on investment in ether was $31,185,857, indicating significant price fluctuations. This volatility poses a substantial risk to the Trust's value.
• Regulatory Uncertainty for Digital Assets [high — regulatory]: The regulatory landscape for digital assets, including ether, is still evolving and subject to change. Changes in regulations could impact the Trust's ability to hold, manage, or transact in ether, potentially affecting its operations and investment strategy. The Trust operates under the assumption that ether is not a security, but this classification could be challenged.
• Custody and Security Risks [medium — operational]: The Trust's ether holdings are held by a custodian. Risks associated with the custodian, such as operational failures, cybersecurity breaches, or insolvency, could result in the loss of the Trust's ether. While the Trust aims to mitigate these risks through due diligence, the inherent nature of digital asset custody presents ongoing security concerns.
• Limited Diversification [high — financial]: The Trust's investment strategy is concentrated solely on ether. This lack of diversification means that the Trust's performance is entirely dependent on the price movements and market dynamics of ether. The fair value of ether represented 100.04% of net assets as of September 30, 2025.
• Potential Legal Challenges [medium — legal]: The legal status and classification of digital assets like ether are subject to ongoing debate and potential litigation. Adverse legal rulings or interpretations could impact the Trust's operations, the value of its holdings, or its ability to function as intended.

Industry Context

The digital asset investment landscape is rapidly evolving, with increasing institutional interest in cryptocurrencies like ether. The Franklin Ethereum Trust operates within this dynamic environment, aiming to provide investors with exposure to ether's potential growth. Competition exists from other digital asset funds and direct investment vehicles, necessitating strong performance and clear value proposition.

Regulatory Implications

The evolving regulatory framework for digital assets presents a significant challenge. Uncertainty surrounding the classification and treatment of ether by various global regulators could impact the Trust's operations, compliance, and investor confidence. The Trust's reliance on ether as its sole asset makes it particularly sensitive to regulatory shifts.

What Investors Should Do

1. Monitor Ether Price Volatility: Given that ether constitutes 100.04% of the Trust's net assets, investors should closely track ether's price movements and associated risks.
2. Assess Regulatory Developments: Stay informed about regulatory changes concerning digital assets, as these could materially affect the Trust's investment strategy and value.
3. Evaluate Expense Ratios: While currently low at $49,943 for the six-month period, investors should monitor the Sponsor's fee and other potential expenses as the Trust scales.
4. Consider Diversification Needs: For investors seeking broader diversification, the Trust's sole focus on ether may not be suitable. Assess personal portfolio diversification goals.
5. Review NAV Growth Drivers: Understand that the substantial NAV growth ($31.35 from $13.94) was primarily driven by unrealized appreciation in ether, a factor that can reverse.

Key Dates

• 2025-09-30: Six months ended September 30, 2025 — Significant growth in investment in ether ($90,961,875 from $21,614,322) and net assets ($90,925,327 from $21,605,398), driven by strong unrealized appreciation ($31,185,857).
• 2025-03-31: As of March 31, 2025 — Starting point for the period of substantial growth, with investment in ether at $21,614,322 and net assets at $21,605,398.
• 2024-07-23: Date of Commencement of operations — Marks the beginning of the Trust's operational history, providing a baseline for performance comparisons.

Glossary

Ether

A decentralized, open-source blockchain system with smart contract functionality. Ether (ETH) is the native cryptocurrency of the Ethereum network. (The primary investment asset of the Franklin Ethereum Trust, its value directly impacts the Trust's net assets and performance.)

Net change in unrealized appreciation (depreciation)

The increase or decrease in the fair value of an investment that has not yet been sold. It reflects the paper gains or losses on the investment. (A major driver of the Trust's net asset growth, accounting for $31,185,857 in gains for the six months ended September 30, 2025.)

Net realized gain (loss)

The profit or loss realized from selling an investment. It is calculated as the difference between the selling price and the original cost basis. (Contributed $2,907,325 to the Trust's net assets from operations for the six months ended September 30, 2025.)

Sponsor's fee

A fee paid to the entity that sponsors or establishes the trust, typically for management and administrative services. (The primary operating expense for the Trust, totaling $49,943 for the six months ended September 30, 2025.)

Net asset value (NAV) per Share

The market value of a fund's assets minus its liabilities, divided by the number of outstanding shares. It represents the per-share value of the fund's holdings. (Increased significantly from $13.94 to $31.35 per share for the Trust, reflecting the growth in underlying ether holdings.)

Emerging growth company

A company that has total annual gross revenues of less than $1 billion during its first fiscal year following the initial public offering. Such companies are eligible for certain exemptions from reporting requirements under the JOBS Act. (The Trust benefits from reduced reporting requirements, potentially lowering compliance costs.)

Year-Over-Year Comparison

The six months ended September 30, 2025, show a dramatic improvement compared to the prior year period. Net assets surged to $90,925,327 from $21,605,398, a growth of over 321%. This is primarily attributed to a significant increase in the fair value of ether holdings and a substantial net change in unrealized appreciation of $31,185,857, contrasting with a net decrease in net assets of $6,971,976 in the prior period. The number of outstanding shares also increased significantly from 1,550,000 to 2,900,000, reflecting successful capital raises.

Key Financial Figures

• $1.235 billion — rust has total annual gross revenues of $1.235 billion or more; the last day of the fiscal y
• $1 billion — ous three-year period, issued more than $1 billion in non-convertible debt; or the date
• $700 million — (i.e., an issuer that (1) has more than $700 million in outstanding equity held by non-affil

Filing Documents

• ef20054990_10q.htm (10-Q) — 692KB
• ef20054990_ex31-1.htm (EX-31.1) — 12KB
• ef20054990_ex31-2.htm (EX-31.2) — 12KB
• ef20054990_ex32-1.htm (EX-32.1) — 7KB
• ef20054990_ex32-2.htm (EX-32.2) — 7KB
• image.gif (GRAPHIC) — 10KB
• 0001140361-25-041936.txt ( ) — 3792KB
• ezet-20250930.xsd (EX-101.SCH) — 25KB
• ezet-20250930_def.xml (EX-101.DEF) — 148KB
• ezet-20250930_lab.xml (EX-101.LAB) — 166KB
• ezet-20250930_pre.xml (EX-101.PRE) — 167KB
• ezet-20250930_cal.xml (EX-101.CAL) — 17KB
• ef20054990_10q_htm.xml (XML) — 619KB

FINANCIAL INFORMATION

Part I. FINANCIAL INFORMATION Page

Unaudited Financial Statements of the Trust and the Fund

Item 1. Unaudited Financial Statements of the Trust and the Fund 1

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

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 26

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 29

Controls and Procedures

Item 4. Controls and Procedures 29

OTHER INFORMATION

Part II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 30

Risk Factors

Item 1A. Risk Factors 30

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 33

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 33

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 33

Other Information

Item 5. Other Information 33

Exhibits

Item 6. Exhibits 33

Signatures

Signatures 35 3 Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1. Unaudited Financial Statements of the Trust and Fund FRANKLIN ETHEREUM ETF FRANKLIN ETHEREUM TRUST INDEX TO UNAUDITED FINANCIAL STATEMENTS Page Combined Statements of Assets and Liabilities at September 30, 2025 and March 31, 2025 for Franklin Ethereum Trust 2 Combined Schedules of Investments at September 30, 2025 and March 31, 2025 for Franklin Ethereum Trust 3 Combined Statements of Operations for the three and six months ended September 30, 2025 and the period from July 23, 2024. (Date of Commencement of operations) to September 30, 2024 for Franklin Ethereum Trust 4 Combined Statements of Cash Flows for the six months ended September 30, 2025 and the period from July 23, 2024. (Date of Commencement of operations) to September 30, 2024 for Franklin Ethereum Trust 5 Combined Statements of Changes in Net Assets for the three and six months ended September 30, 2025 and the period from July 23, 2024. (Date of Commencement of operations) to September 30, 2024 for Franklin Ethereum Trust 6 Notes to the Combined Financial Statements for Franklin Ethereum Trust 7 14 Schedules of Investments at September 30, 2025 and March 31, 2025 for Franklin Ethereum ETF 15 16 17 18

Notes to Financial Statements for Franklin Ethereum ETF

Notes to Financial Statements for Franklin Ethereum ETF 19 1 Table of Contents FRANKLIN ETHEREUM TRUST Combined Statements of Assets and Liabilities (Unaudited) September 30, 2025 March 31, 2025 Assets Investment in ether, at fair value (a) $ 90,961,875 $ 21,614,322 Total a ssets 90,961,875 21,614,322 Liabilities Sponsor's fee payable 36,548 8,924 Total liabilities 36,548 8,924 Commitments and contingencies (Note 7) Net assets $ 90,925,327 $ 21,605,398 Shares issued and outstanding (b) 2,900,000 1,550,000 Net asset value per Share $ 31.35 $ 13.94 (a) Cost of investment in ether: $ 76,013,644 at September 30, 2025 and $ 37,851,948 at March 31, 2025. (b) No par value, unlimited amount authorized. See accompanying notes to the unaudited combined financial statements. 2 Table of Contents FRANKLIN ETHEREUM TRUST Combined Schedules of Investments (Unaudited) September 30, 2025 Quantity of ether Cost Fair Value Fair Value as a % of Net Assets Investment in ether 22,020.1883 $ 76,013,644 $ 90,961,875 100.04 % Total investments 22,020.1883 $ 76,013,644 $ 90,961,875 100.04 % Less liabilities ( 36,548 ) ( 0.04 )% Net assets $ 90,925,327 100.00 % March 31, 2025 Quantity of ether Cost Fair Value Fair Value as a % of Net Assets Investment in ether 11,780.2062 $ 37,851,948 $ 21,614,322 100.04 % Total investments 11,780.2062 $ 37,851,948 $ 21,614,322 100.04 % Less liabilities ( 8,924 ) ( 0.04 )% Net assets $ 21,605,398 100.00 % See accompanying notes to the unaudited combined financial statements. 3 Table of Contents FRANKLIN ETHEREUM TRUST Combined Statements of Operations (Unaudited) For the Three Months Ended September 30, 2025 For the Six Months Ended September 30, 2025 For the period July 23, 2024 (Date of commencement of operations) through September 30, 2024 Expenses: Sponsor's fee $

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