The information in this prospectus is not complete and may be changed. We may not
sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state
where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JULY 8, 2024
PRELIMINARY PROSPECTUS
GRAYSCALE ETHEREUM TRUST (ETH)
Grayscale Ethereum Trust (ETH) (the Trust) is a Delaware statutory trust that issues common units of fractional undivided beneficial interest
(Shares), which represent ownership in the Trust. The Trusts purpose is to hold Ether, which are digital assets that are created and transmitted through the operations of the peer-to-peer Ethereum Network, a decentralized network of computers that operates on cryptographic protocols. The Trusts investment objective is for the value of the Shares (based on Ether per Share) to
reflect the value of Ether held by the Trust, as determined by reference to the Index Price (as defined herein), less the Trusts expenses and other liabilities. While an investment in the Shares is not a direct investment in Ether, the Shares
are designed to provide investors with a cost-effective and convenient way to gain investment exposure to Ether. Grayscale Investments, LLC is the sponsor of the Trust (the Sponsor), CSC Delaware Trust Company is the trustee of the Trust
(the Trustee), The Bank of New York Mellon is the transfer agent of the Trust (in such capacity, the Transfer Agent) and the administrator of the Trust (in such capacity, the Administrator), Coinbase, Inc. is the
prime broker of the Trust (the Prime Broker) and Coinbase Custody Trust Company, LLC is the custodian of the Trust (the Custodian).
The Shares have been approved for listing on NYSE Arca, Inc. (NYSE Arca) under the symbol ETHE. The Trust intends to issue Shares on a
continuous basis and is registering an indeterminate number of Shares. It is expected that the Shares will be sold to the public at varying prices to be determined by reference to, among other considerations, the price of Ether and the trading price
of the Shares on the NYSE Arca at the time of each sale.
The Shares may be purchased from the Trust only in one or more blocks of 10,000 Shares (a
block of 10,000 Shares is called a Basket). The Trust issues Baskets of Shares to certain authorized participants (Authorized Participants) on an ongoing basis as described in Plan of Distribution. In addition,
the Trust redeems Shares in Baskets on an ongoing basis from Authorized Participants. The Trust is currently able to accept Cash Orders (as defined herein), pursuant to which an Authorized Participant will deposit cash into, or accept cash from, the
Cash Account in connection with the creation and redemption of Baskets, and a third party (a Liquidity Provider) that is not an agent of, or otherwise acting on behalf of, such Authorized Participant will obtain or receive Ether in
exchange for cash in connection with such order. However, and in common with other spot digital asset exchange-traded products, the Trust is not at this time able to create and redeem shares via in-kind
transactions with Authorized Participants, and there has yet to be definitive regulatory guidance on whether and how registered broker-dealers can hold and deal in Ether in compliance with the federal securities laws. To the extent further
regulatory clarity emerges, the Sponsor expects NYSE Arca to seek the necessary regulatory approval to amend its listing rules to permit the Trust to do so (the In-Kind Regulatory Approval).
Subject to NYSE Arca seeking and obtaining In-Kind Regulatory Approval, in the future the Trust may also create and redeem Shares via in-kind transactions with
Authorized Participants or their designees (any such designee, an AP Designee) in exchange for Ether. There can be no assurance as to when such regulatory clarity will emerge, or when NYSE Arca will seek or obtain such regulatory
approval, if at all. See Description of Creation and Redemption of Shares. Some of the activities of the Authorized Participants will result in their being deemed participants in a distribution in a manner which would render them
statutory underwriters and subject them to the prospectus-delivery and liability provisions under the Securities Act of 1933, as amended (the Securities Act). See Plan of Distribution. As of July 2, 2024, the number of
Ether required to create a Basket of 10,000 Shares is approximately 94.32680472 Ether.
In addition, and in common with other spot Ether
exchange-traded products at this time, none of the Trust, the Sponsor, the Custodian, nor any other person associated with the Trust will, directly or indirectly, engage in Staking (as defined herein), meaning no action will be taken pursuant to
which any portion of the Trusts Ether becomes subject to Ethereum proof-of-stake validation or is used to earn additional Ether or generate income or other earnings, and there can be no assurance that the Trust, the Sponsor, the Custodian or
any other person associated with the Trust will ever be permitted to engage in such activity in the future.
Investing in the Shares involves
significant risks. You should carefully consider the risk factors described beginning on page 19 in this prospectus, in Part IItem 1A. Risk Factors beginning on page 47 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, in Part IIItem 1.A. Risk Factors beginning on page 22 in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, in
any applicable prospectus supplement and in the other documents incorporated or deemed incorporated by reference herein before you invest in the Shares.
Neither the Securities and
Exchange Commission nor any state securities commission has approved or disapproved of the securities offered in this prospectus, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The Shares are neither interests in nor obligations of the Sponsor or the Trustee.
The U.S. dollar value of a Basket of Shares at 4:00 p.m., New York time, on the trade date of a creation or redemption order is equal to the Basket
Amount, which is the number of Ether required to create or redeem a Basket of Shares, multiplied by the Index Price, which is the U.S. dollar value of an Ether derived from the Digital Asset Trading Platforms (as defined herein)
that are reflected in the CoinDesk Ether Price Index (ETX) (the Index), calculated at 4:00 p.m., New York time, on each business day. The Index Price is calculated using non-GAAP methodology and is
not used in the Trusts financial statements.
The Trust is not a registered investment company under the Investment Company Act of 1940, as amended
(the Investment Company Act) and is therefore not subject to regulation under the Investment Company Act. Furthermore, the Sponsor believes that the Trust is not a commodity pool for purposes of the Commodity Exchange Act of 1936 (the
CEA), as administered by the Commodity Futures Trading Commission (the CFTC) and that neither the Sponsor nor the Trustee is subject to regulation by the CFTC as a commodity pool operator or a commodity trading advisor. See
Part IItem 1A. Risk FactorsRisk Factors Related to the Trust and the SharesShareholders do not have the protections associated with ownership of shares in an investment company registered under the Investment Company Act or
the protections afforded by the CEA in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
The date of this
prospectus is , 2024.