The information in this prospectus is not complete and may be changed. We may not sellthese 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 wherethe offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED APRIL 23, 2024
PRELIMINARY PROSPECTUS
GRAYSCALE ETHEREUM MINI TRUST (ETH)
Grayscale Ethereum Mini 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, adecentralized 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 referenceto 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 convenientway to gain investment exposure to Ether. Grayscale Investments, LLC is the sponsor of the Trust (the Sponsor), Delaware Trust Company is the trustee of the Trust (the Trustee), The Bank of New York Mellon is the transferagent 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 CoinbaseCustody Trust Company, LLC is the custodian of the Trust (the Custodian).
Prior to this offering, there has been no public market for theShares. The Trust intends to list the shares on NYSE Arca, Inc. (NYSE Arca) under the symbol ETH. It is expected that the Shares will be sold to the public at varying prices to be determined by reference to, among otherconsiderations, 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 theTrust only in one or more blocks of Shares (a block of Shares is called a Basket). The Trust issues Baskets of Shares to certain authorized participants (Authorized Participants) on anongoing 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 towhich 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 otherwiseacting 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 tocreate 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 securitieslaws. 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 NYSEArca 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 exchangefor 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 activitiesof 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 Actof 1933, as amended (the Securities Act). See Plan of Distribution. As of , the number of Ether required to create a Basket of Shares is approximately Ether.
Investing in the Shares involves significant risks. You should carefully consider the risk factors described in RiskFactors starting on page 20 before you invest in the Shares.
The Trust is an emerginggrowth company as defined in the Jumpstart Our Business Startups Act and will therefore be subject to reduced reporting requirements.
Neitherthe Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities 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.
On , 2024, the Sponsor purchased $ in Shares (the Seed Shares), comprising Shares at a per Share priceof $ . The Seed Shares are currently anticipated to be redeemed for cash in connection with, and immediately prior to the consummation of, the Initial Distribution (as defined below).
Prior to the creation of any Baskets through Authorized Participants pursuant to this prospectus, the Sponsor currently intends to effectuate the initialcreation of Shares of the Trust (the Initial Distribution Basket Creation) through the contribution by Grayscale Ethereum Trust (ETH) (ETHE) of a certain amount of Ether to the Trust as consideration and in exchange for newlycreated Shares of the Trust. The newly created Shares of the Trust will then be distributed to shareholders of ETHE (ETHE Shareholders) (determined as of a date to be determined by the Sponsor (the Record Date)), pro ratabased on a 1:1 ratio, such that for each one (1) share of ETHE (ETHE Shares) held by each ETHE Shareholder on the Record Date, such ETHE Shareholder will be entitled to receive one (1) Share of the Trust on a subsequent date tobe determined by the Sponsor (the Distribution Date) (such transactions collectively, the Initial Distribution).
As a result ofthe contemplated Initial Distribution, following the Distribution Date (and prior to the creation of any Baskets through Authorized Participants pursuant to this prospectus), the Trust will hold approximately % of the Ether thatwas held by ETHE as of the Record Date and ETHE would hold the remaining approximately % of the Ether that was held by ETHE as of the Record Date, in each case, reduced by the portion of the Sponsors Fee (as definedherein) attributable to such Ether accrued and paid between the Record Date and the Distribution Date. Based on the number of ETHE Shares outstanding and amount of Ether held by ETHE as of the Record Date, the Sponsor anticipates that Shares will be distributed to ETHE Shareholders in the aggregate, and that the Trust will hold approximately Ether immediately following the consummation of the Initial Distribution, reflecting anillustrative per share price of $ for the Trusts Shares. Prior to the creation of any Baskets through Authorized Participants pursuant to this prospectus, these Shares will represent all of theoutstanding Shares of the Trust.
Neither the number of outstanding ETHE Shares nor the exposure of ETHE Shareholders to Ether underlying their aggregateshareholdings (including ETHE Shares and Shares of the Trust) are expected to change as a result of the contemplated Initial Distribution. No consent, authorization, approval or proxy is being sought from ETHE Shareholders in connection with theInitial Distribution, and ETHE Shareholders will not need to pay any consideration, exchange or surrender existing ETHE Shares or take any other action to receive Shares of the Trust on the Distribution Date. Following the Initial Distribution, theTrust and ETHE will operate as independent NYSE Arca listed exchanged-traded commodity products, and neither will have any share ownership, beneficial or otherwise, in the other.
The Sponsor does not expect the Initial Distribution to be a taxable event for ETHE or its shareholders.
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 BasketAmount, 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 financialstatements.
The date of this prospectus is , 2024.