21Shares Ethereum ETF (CBOE: TETH)

21Shares Ethereum ETF operates as a passively managed exchange-traded fund designed to provide investors with exposure to ether, the native cryptocurrency of the Ethereum blockchain. The Trust issues shares that trade on the Cboe BZX Exchange under the ticker "TETH," aiming to track the performance of ether as measured by the CME CF Ether-Dollar Reference Rate, adjusted for expenses and potential staking rewards. Unlike actively managed funds, the Trust does not engage in frequent trading or portfolio adjustments, instead holding ether as its primary asset and valuing shares daily based on the Index. The Trust’s structure excludes traditional corporate governance, such as officers or directors, and relies on a network of service providers, including custodians, administrators, and staking partners, to execute its operations.

The Trust generates revenue primarily through a unitary Sponsor Fee of 0.21% of its ether holdings, which compensates the Sponsor for services rendered under the Trust Agreement. This fee accrues daily and is payable in ether weekly, though the Sponsor has periodically waived it, including a six-month waiver following the Trust’s launch and a subsequent one-year waiver beginning in October 2025. Additionally, the Trust may earn staking rewards by delegating a portion of its ether holdings to third-party staking providers, with 75% of gross staking proceeds retained by the Trust and the remainder allocated to the Sponsor and staking partners. The Trust does not engage in lending, derivatives, or leverage, and its ether holdings are not used as collateral for any financial arrangements.

The Trust operates through a single functional framework without distinct operational segments.

21Shares Ethereum ETF competes in the rapidly evolving digital asset exchange-traded product (ETP) space, where it faces rivalry from other ether-focused and broader cryptocurrency ETPs. Key competitors include firms offering similar spot ether exposure, such as Grayscale and Bitwise, as well as providers of diversified crypto ETPs. The Trust’s competitive advantages stem from its affiliation with the 21Shares Group, which manages approximately $7.56 billion in assets across 67 digital asset-related ETPs as of December 2025. This affiliation provides operational expertise, a proven track record in ETP management since 2018, and access to a robust infrastructure for custody, staking, and trading. The Trust’s fee structure, including periodic waivers, and its passive management approach may also appeal to cost-conscious investors seeking direct ether exposure without active trading risks.

The Trust’s customer base consists primarily of institutional and retail investors seeking regulated exposure to ether through a traditional exchange-traded vehicle. Authorized Participants, which are registered broker-dealers, facilitate the creation and redemption of shares in blocks of 10,000, enabling market makers and large investors to engage in arbitrage and liquidity provision. While the Trust does not disclose specific investor names, its shares are accessible to the general public through brokerage accounts, making it suitable for individual investors, financial advisors, and institutional allocators. The Trust’s reliance on Authorized Participants ensures that its shares remain liquid and closely aligned with the underlying ether market.