Bitwise Ethereum ETF (ETHW) 10-Q 8 Aug 24 2024 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2024	Aug. 08, 2024
Cover [Abstract]
Entity Registrant Name	BITWISE ETHEREUM ETF
Document Type	10-Q
Document Quarterly Report	true
Amendment Flag	false
Document Period End Date	Jun. 30, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Central Index Key	0002013744
Trading Symbol	ETHW
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding		12,370,000
Entity Emerging Growth Company	true
Entity Small Business	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity File Number	001-42159
Entity Tax Identification Number	99-6361348
Entity Address, Address Line One	250 Montgomery Street
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	San Francisco
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94104
City Area Code	415
Local Phone Number	707-3663
Document Transition Report	false
Entity Incorporation, State or Country Code	DE
Entity Interactive Data Current	Yes
Title of 12(b) Security	Bitwise Ethereum ETF Shares
Security Exchange Name	NYSEArca

Statement of Assets and Liabili

Statement of Assets and Liabilities	Jun. 30, 2024 USD ($) $ / shares shares
Assets [Abstract]
Investment in ether, at fair value (cost $0)	$ 0
Cash	200
Total assets	200
Liabilities [Abstract]
Sponsor Fee payable	0
Total liabilities	0
Net Assets	$ 200
Shares issued and outstanding, no par value, unlimited amount authorized | shares	8
Net asset value per Share | $ / shares	$ 25

Statement of Assets and Liabi_2

Statement of Assets and Liabilities (Parenthetical)	6 Months Ended
	Jun. 30, 2024 USD ($) $ / shares
Investment in ether, at cost | $	$ 0
Common stock, no par value | $ / shares	$ 0
Common Stock, Shares Authorized, Unlimited [Fixed List]	Unlimited

Statement of Changes in Net Ass

Statement of Changes in Net Assets	1 Months Ended
	Jun. 30, 2024 USD ($) shares
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest [Abstract]
Net investment loss	$ 0
Net realized gain (loss) on investment in ether transferred to pay Sponsor Fee	0
Net change in unrealized appreciation (depreciation)	0
Net increase (decrease) in net assets resulting from operations	0
Increase (decrease) in net assets from capital share transactions
Creations for Shares issued	200
Redemptions for Shares redeemed	0
Net increase (decrease) in net assets resulting from capital share transactions	200
Total increase (decrease) in net assets from operations and capital share transactions	200
Net assets
Beginning of period	0
End of period	$ 200
Increase (Decrease) in Partners' Capital [Roll Forward]
Shares issued | shares	8
Shares redeemed | shares	0
Net increase (decrease) in Shares issued and outstanding | shares	8
Shares outstanding at end of period | shares	8

Statement of Cash Flows

Statement of Cash Flows	1 Months Ended
	Jun. 30, 2024 USD ($)
Cash flow from operating activities
Net increase (decrease) in net assets resulting from operations	$ 0
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
Purchases of ether	0
Proceeds from ether sold	0
Net realized (gain) loss from investment in ether transferred to pay Sponsor Fee	0
Net realized (gain) loss from investment in ether sold for redemptions	0
Net change in unrealized (appreciation) on investment in ether	0
Increase (Decrease) in Sponsor Fee payable	0
Net cash provided by (used in) operating activities	0
Cash flow from financing activities
Shares issued	200
Shares redeemed	0
Net cash provided by (used in) financing activities	200
Net increase (decrease) in cash	200
Cash, beginning of period	0
Cash, end of period	$ 200

Insider Trading Arrangements

Insider Trading Arrangements	3 Months Ended
	Jun. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false
Rule 10b51 Arr Modified Flag	false
Non Rule 10b51 Arr Modified Flag	false

Organization

Organization	6 Months Ended
	Jun. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	1. Organization Bitwise Ethereum ETF (the “Trust”), is an investment trust organized on February 16, 2024, under Delaware law pursuant to a Declaration of Trust and Trust Agreement (the “Trust Agreement”). The Trust’s investment objective is to seek to provide exposure to the value of ether held by the Trust, less the expenses of the Trust’s operations, generally just the sponsor’s management fee. In seeking to achieve its investment objective, the Trust’s sole asset is ether. The Trust is an Exchange Traded Product (“ETP”) that issues common shares of beneficial interest (“Shares”) that are listed on the NYSE Arca, Inc. (the “Exchange”) under the ticker symbol “ETHW,” providing investors with an efficient means to obtain market exposure to the price of ether. Bitwise Investment Advisers, LLC (the “Sponsor”) serves as the Sponsor for the Trust. The Sponsor arranged for the creation of the Trust and is responsible for the ongoing registration of the Shares for their public offering in the U.S. and the listing of Shares on the Exchange. The Sponsor develops a marketing plan for the Trust, prepares marketing materials regarding the Shares, and operates the marketing plan of the Trust on an ongoing basis. The Sponsor also oversees the additional service providers of the Trust and exercises managerial control of the Trust as permitted under the Trust Agreement. The Sponsor has agreed to pay all normal operating expenses of the Trust (except for litigation expenses and other extraordinary expenses) out of the Sponsor’s unitary management fee and may determine in its sole discretion to assume legal fees and expenses of the Trust in excess of the $ 500,000 per annum. The Sponsor also paid the costs of the Trust’s organization. Delaware Trust Company acts as the trustee of the Trust (the “Trustee”) for the purpose of creating a Delaware statutory trust in accordance with the Delaware Statutory Trust Act (“DSTA”) which states the Trust have at least one trustee with a principal place of business in the State of Delaware. On May 28, 2024, Bitwise Asset Management, Inc. ("BAM"), the parent company of the Sponsor, purchased 8 Shares at a per-Share price of $ 25.00 in a transaction exempt from registration under Section 4(a)(2) of the 1933 Act. Delivery of the Seed Shares was made on May 28, 2024. As of June 30, 2024, the Trust has had no operations other than those actions relating to organizational and registration matters, including the sale and issuance of the Trust’s Shares to BAM , the sole shareholder of eight ( 8 ) Shares of the Trust. Proceeds from the issuance of these Shares were held in cash as presented on the Trust’s statement of assets and liabilities. In the ordinary course of operation, the Trust will purchase and sell ether directly and it will create or redeem its Shares in cash-settled transactions in blocks of 10,000 Shares at the Trust’s net asset value per Share and only in transactions with financial firms that are authorized to purchase or redeem Shares with the Trust (each, an “Authorized Participant”). An Authorized Participant will deliver, or cause to be delivered, cash to the Trust when it purchases Shares from the Trust, and the Trust will deliver cash to an Authorized Participant, or its designee, when it redeems Shares with the Trust. Authorized Participants, and their customers, may then, in turn, offer Shares to the public at prices that depend on various factors, including the supply and demand for Shares, the value of the Trust’s assets, and market conditions at the time of a transaction. Investors who buy or sell Shares during the day from their broker may do so at a premium or discount relative to the net asset value of the Shares.

Significant Accounting Policies

Significant Accounting Policies	6 Months Ended
	Jun. 30, 2024
Accounting Policies [Abstract]
Significant Accounting Policies	2. Significant Accounting Policies The following is a summary of significant accounting policies consistently followed by the Trust in the preparation of its financial statements. Basis of presentation The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Trust is an investment company and follows the specialized accounting and reporting guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC” or “Codification”) Topic 946, Financial Services—Investment Companies. Use of Estimates The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these financial statements. Actual results could differ from those estimates. Indemnifications In the normal course of business, the Trust enters into contracts and agreements that contain a variety of representations and warranties and which provide general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred. The Trust expects the risk of any future obligation under these indemnifications to be remote. Cash Generally, the Trust does not intend to hold any cash. Cash includes non-interest bearing non-restricted cash with one institution. Cash in a bank deposit account, at times, may exceed U.S. federally insured limits. The Trust has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk on such bank deposits. On June 30, 2024, the Trust held $ 200 in cash relating to the issuance of the Seed Shares. Income Taxes The Trust is classified as a “grantor trust” for United States federal income tax purposes. As a result, the Trust itself is not subject to United States federal income tax. Instead, the Trust’s income and expenses “flow through” to the shareholders, and the Administrator reports the Trust’s income, gains, losses, and deductions to the Internal Revenue Service on that basis. The Sponsor has analyzed applicable tax laws and regulations and their application to the Trust and does not believe that there are any uncertain tax positions that require recognition of a tax liability as of June 30, 2024. The Trust is required to determine whether its tax positions are more likely than not to be sustained on examination by the applicable taxing authority, based on the technical merits of the position. Tax positions not deemed to meet a more likely than not threshold would be recorded as a tax expense in the current year. As of June 30, 2024, the Trust has determined that no provision for income taxes is required and no liability for unrecognized tax benefits has been recorded. The Trust does not expect that its assessment related to unrecognized tax benefits will materially change over the next 12 months. However, the Trust’s conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, the nexus of income among various tax jurisdictions; compliance with U.S. federal, U.S. state, and tax laws of jurisdictions in which the Trust operates in; and changes in the administrative practices and precedents of the relevant authorities. The Trust is required to analyze all open tax years. Open tax years are those years that are open for examination by the relevant income taxing authority. There were no examinations in progress at period end. Organizational and offering costs The costs of the Trust’s organization and the initial offering of the Shares will be borne directly by the Sponsor. The Trust will not be obligated to reimburse the Sponsor.

Related Party Transactions and

Related Party Transactions and Agreements	6 Months Ended
	Jun. 30, 2024
Related Party Transactions [Abstract]
Related Party Transactions and Agreements	3. Related Party Transactions and Agreements For the period ended June 30, 2024, as the Trust has had no operations other than those actions relating to organizational and registration matters, including the sale and issuance of the Trust’s shares to BAM, the Sponsor has not yet begun to charge the Trust an annual management fee, which it anticipates charging once operations commence. Once operations commence, the Trust is expected to pay an annualized management fee to the Sponsor as compensation for services performed under the Trust Agreement; but it has not yet determined the amount of such fee. In exchange for the management fee, the Sponsor has agreed to assume and pay all ordinary expenses of the Trust, including the Trustee’s fee and out-of-pocket expenses, the fees of the Trust’s regular service providers, exchange listing fees, SEC registration fees, SEC filing costs, audit fees and ordinary legal expenses. The Sponsor’s management fee is paid by delivery of ether, monthly on the first Business Day of the month in respect of fees payable for the prior month. The delivery is of that number of ether which equals the daily accrual of the Sponsor Fee for such prior month. The Sponsor, from time to time, may temporarily waive all or a portion of the Sponsor Fee at its discretion for a stated period of time. As of the date of these Financial Statements, there were no amounts payable to related parties.

Beneficial Ownership

Beneficial Ownership	6 Months Ended
	Jun. 30, 2024
Beneficial Ownership [Abstract]
Beneficial Ownership	4. Beneficial Ownership As of the date of these financial statements BAM owned 100 % of the outstanding Shares of the Trust.

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2024
Subsequent Events [Abstract]
Subsequent Events	5. Subsequent Events The Trust's registration statement on Form S-1 relating to its continuous public offering of Shares was declared effective by the U.S. Securities and Exchange Commission on July 22, 2024 and the Shares of the Trust were listed on the Exchange on July 23, 2024. On July 22, 2024, BAM redeemed the entirety of its 8 Seed Shares for $ 200 and Bitwise Investment Manager, LLC (“BIM”), an affiliate of the Sponsor, purchased the initial 100,000 Shares of the Trust (the “Seed Baskets”) for $ 2,500,000 , at a per-Share price of $ 25.00 . BIM acted as a statutory underwriter in connection with the initial purchase of the Seed Baskets. During July 23, 2024, BIM sold all of its 100,000 Shares of the Trust for cash. Following the commencement of operations on July 22, 2024, the Trust pays the unitary Sponsor Fee of 0.20 % per annum of the Trust's ether holdings and agreed to waive the entire Sponsor Fee on the first $ 500 million of Trust assets through January 22, 2025. Other than the items noted above there were no subsequent events requiring adjustment or additional disclosure in the financial statements.

Significant Accounting Polici_2

Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2024
Accounting Policies [Abstract]
Basis of presentation	Basis of presentation The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Trust is an investment company and follows the specialized accounting and reporting guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC” or “Codification”) Topic 946, Financial Services—Investment Companies.
Use of Estimates	Use of Estimates The preparation of the financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these financial statements. Actual results could differ from those estimates.
Indemnifications	Indemnifications In the normal course of business, the Trust enters into contracts and agreements that contain a variety of representations and warranties and which provide general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred. The Trust expects the risk of any future obligation under these indemnifications to be remote.
Cash	Cash Generally, the Trust does not intend to hold any cash. Cash includes non-interest bearing non-restricted cash with one institution. Cash in a bank deposit account, at times, may exceed U.S. federally insured limits. The Trust has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk on such bank deposits. On June 30, 2024, the Trust held $ 200 in cash relating to the issuance of the Seed Shares.
Income Taxes	Income Taxes The Trust is classified as a “grantor trust” for United States federal income tax purposes. As a result, the Trust itself is not subject to United States federal income tax. Instead, the Trust’s income and expenses “flow through” to the shareholders, and the Administrator reports the Trust’s income, gains, losses, and deductions to the Internal Revenue Service on that basis. The Sponsor has analyzed applicable tax laws and regulations and their application to the Trust and does not believe that there are any uncertain tax positions that require recognition of a tax liability as of June 30, 2024. The Trust is required to determine whether its tax positions are more likely than not to be sustained on examination by the applicable taxing authority, based on the technical merits of the position. Tax positions not deemed to meet a more likely than not threshold would be recorded as a tax expense in the current year. As of June 30, 2024, the Trust has determined that no provision for income taxes is required and no liability for unrecognized tax benefits has been recorded. The Trust does not expect that its assessment related to unrecognized tax benefits will materially change over the next 12 months. However, the Trust’s conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, the nexus of income among various tax jurisdictions; compliance with U.S. federal, U.S. state, and tax laws of jurisdictions in which the Trust operates in; and changes in the administrative practices and precedents of the relevant authorities. The Trust is required to analyze all open tax years. Open tax years are those years that are open for examination by the relevant income taxing authority. There were no examinations in progress at period end.
Organizational and offering costs	Organizational and offering costs The costs of the Trust’s organization and the initial offering of the Shares will be borne directly by the Sponsor. The Trust will not be obligated to reimburse the Sponsor.

Organization - Additional Infor

Organization - Additional Information (Details)	6 Months Ended
	Jun. 30, 2024 USD ($) Trustee shares	May 28, 2024 $ / shares shares
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Maximum sponsor fee for legal fees and expenses | $	$ 500,000
Minimum number of trustee should available in trust | Trustee	1
Number of shares in cash-settled transactions in blocks at trust	10,000
BAM
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Shares purchased	8	8
Purchase price per share | $ / shares		$ 25

Significant Accounting Polici_3

Significant Accounting Policies - Additional Information (Details)	6 Months Ended
	Jun. 30, 2024 USD ($)
Accounting Policies [Abstract]
Cash	$ 200
Provision for income taxes	0
Unrecognized tax benefits	$ 0

Fair Value of Ether - Schedule

Fair Value of Ether - Schedule of Changes in Quantity of Ether and Fair Value (Details)	1 Months Ended
	Jun. 30, 2024 USD ($)
Fair Value Disclosures [Abstract]
Net realized gain (loss) on investment in ether	$ 0
Net change in unrealized appreciation (depreciation)	0
Ending balance as of March 31, 2024	$ 0

Related Party Transactions an_2

Related Party Transactions and Agreements - Additional Information (Details)	Jun. 30, 2024 USD ($)
Related Party
Related Party Transaction [Line Items]
Amounts payable	$ 0

Beneficial Ownership - Addition

Beneficial Ownership - Additional Information (Details)	Jun. 30, 2024
BAM
Beneficial Ownership [Line Items]
Percentage of ownership	100%

Subsequent Events - Additional

Subsequent Events - Additional Information (Details) - USD ($)	Jul. 23, 2024	Jul. 22, 2024	May 28, 2024
BAM
Subsequent Event [Line Items]
Purchase price per share			$ 25
Subsequent Event
Subsequent Event [Line Items]
Sponsor fee percentage		0.20%
Trust assets		$ 500,000,000
Subsequent Event | BAM
Subsequent Event [Line Items]
Shares redeemed		8
Shares redeemed, value		$ 200
Subsequent Event | BIM
Subsequent Event [Line Items]
Purchase price per share		$ 25
Amount of initial shares of the trust		100,000
Number of initial shares of the trust		$ 2,500,000
Shares sold for cash	100,000