# 21Shares Ethereum Staking ETF

> Clarifo company profile — qualitative business description generated from
> the company's filings. Financial statements, charts and ratios are
> available on Clarifo (https://www.clarifo.com/fi/companies/21Shares Ethereum Staking ETF).

## Overview

21Shares Ethereum Staking ETF is a U.S. exchange-traded trust that holds ether and seeks to track the CME CF Ether-Dollar Reference Rate—New York Variant, adjusted for expenses and liabilities. Listed under the ticker CETH, the Trust provides investors with exchange-traded exposure to ether and may stake a portion of its holdings through third-party staking providers to generate staking rewards.

## Products & services

• Exchange-traded exposure to ether
• Passive tracking of the CME CF Ether-Dollar Reference Rate
• Ether custody through designated custodians
• Ethereum staking and reward generation
• Cash distributions of staking rewards

- **Ether exposure** (80%) — Shares represent an interest in a trust holding ether and are designed to track ether prices.
- **Staking activities** (20%) — A portion of the Trust's ether may be delegated to validators to earn Ethereum staking rewards.

- Exchange-traded exposure to ether
- Passive tracking of the CME CF Ether-Dollar Reference Rate
- Ether custody through designated custodians
- Ethereum staking and reward generation
- Cash distributions of staking rewards

## Customers

The Trust is purchased primarily by retail and institutional investors seeking exchange-traded exposure to ether without directly managing wallets, private keys, validators, or custody arrangements. Shares trade on an exchange, while authorized participants create and redeem baskets with the Trust for cash. Investors may also value the potential for periodic cash distributions from staking rewards, although distributions depend on network conditions and rewards earned.

- **Retail investors** (primary) — Buy listed CETH shares for ether exposure through standard brokerage and exchange infrastructure.
- **Institutional investors** (primary) — Use the ETF structure to obtain managed custody and operational access to ether.
- **Investment advisers** (secondary) — Allocate client portfolios to ether without directly operating digital-asset wallets or validators.
- **Authorized participants** (secondary) — Create or redeem 10,000-share creation baskets through cash transactions with the Trust.

- Retail investors seeking exchange-traded ether exposure
- Institutional investors requiring regulated market access
- Advisers allocating digital assets through brokerage accounts
- Authorized participants creating and redeeming share baskets
- Crypto-focused investors seeking potential staking distributions

## Geography

The Trust is organized and listed in the United States, with shares traded on a U.S. exchange and operations administered through U.S.-based market infrastructure. Its economic exposure is global because ether trades on international digital-asset markets and staking depends on the Ethereum network rather than a particular physical market. Custody, valuation, staking-provider, and regulatory exposures may therefore span multiple jurisdictions even though the investment vehicle is U.S.-based.

- U.S.-organized investment trust
- Shares trade through U.S. exchange infrastructure
- Ether exposure reflects global digital-asset markets
- Ethereum staking depends on a worldwide network
- Custody and service providers may create cross-border exposure

## Strategy

The Trust's strategy combines passive ether price tracking with selective staking intended to increase the economic value of held ether through network rewards. The Sponsor uses a Utilization Rate framework to balance expected staking income against redemption liquidity, lock-up periods, provider reliability, and market conditions. Maintaining exchange liquidity and operational access to unstaked ether is central to preserving the ETF's ability to support creations, redemptions, and secondary-market trading.

- **Optimize staking utilization** (short-term) — Higher staking participation may generate rewards, but locked assets can constrain liquidity.
- **Maintain liquidity for creations and redemptions** (short-term) — Unstaked ether and operational liquidity support the ETF structure during market stress.
- **Expand the value proposition of listed ether exposure** (medium-term) — Staking rewards can differentiate the product from ether vehicles that only track price appreciation.

- Track ether through a passive, non-leveraged structure
- Stake a variable portion of ether to earn network rewards
- Balance staking yield against redemption liquidity needs
- Use third-party providers for validator infrastructure
- Distribute eligible staking rewards to shareholders

## Risks

The Trust's value is primarily exposed to ether price volatility, Ethereum network performance, and the reliability of its custodians and staking providers. Staking introduces additional risks, including validator slashing, provider underperformance, protocol changes, and temporary inaccessibility of staked ether during activation or exit periods. The ETF can also trade at a premium or discount to NAV, while regulatory, custody, cybersecurity, and market-liquidity developments may affect investor access and Share value.

- **Ether market volatility** [critical] — The Trust holds ether as its principal asset, so changes in ether prices directly affect NAV and Share value.
- **Staking slashing and validator losses** [high] — Ethereum validators can be penalized for malicious activity or poor performance, reducing the Trust's ether holdings.
- **Staking lock-up and liquidity constraints** [high] — Activation and exit processes can make staked ether inaccessible during network congestion or elevated redemptions.
- **Staking provider dependence** [high] — Third parties supply the hardware, software, and services needed to operate validator nodes and may not optimize rewards.
- **Ethereum protocol and regulatory change** [high] — Protocol changes or legal restrictions could reduce staking availability, network value, or the Trust's ability to operate as intended.
- **Premium or discount to NAV** [medium] — Exchange trading conditions, creation and redemption activity, and ether-market liquidity can cause Shares to diverge from NAV.

- Ether price volatility directly affects NAV and Share value
- Validator misconduct can cause slashing losses
- Staked ether may be locked for hours, days, or weeks
- Provider failures may reduce rewards or disrupt staking
- Custody, cybersecurity, and regulatory risks affect access
- Shares may trade away from the Trust's NAV

## Accounting

The Trust values ether at fair value under U.S. GAAP and ASC 820, using an exchange-traded price from its principal ether market at 4:00 p.m. ET for financial statement measurement. NAV uses the applicable Index, while Principal Market NAV uses the principal-market ether price, so these non-GAAP measures can differ from financial statement values. Staking rewards, provider compensation, cash distributions, and potential slashing losses affect the timing and amount of assets and expenses reported by the Trust.

- **Fair value measurement of ether** — Reported assets and net asset value fluctuate with digital-asset prices.
- **Index-based NAV versus principal-market NAV** — Different valuation references can create temporary differences between reported measures.
- **Staking reward recognition** — Reward income and potential shareholder distributions vary by period.
- **Staking provider compensation** — The amount of rewards retained by the Trust is lower than gross staking rewards.
- **Slashing and staking losses** — Potential impairments or reductions in investment value can affect reported results.

- Ether is measured at fair value under ASC 820
- Principal-market pricing may differ from Index-based NAV
- Staking rewards vary with network and utilization conditions
- Provider compensation reduces rewards retained by the Trust
- Slashing losses may reduce the value of staked ether
- Quarterly distributions depend on realized staking rewards

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*Last updated: 2026-09-24T12:27:01.855644+00:00*