Quarterly Report for Quarter Ending September 30, 2024 (Form 10-Q)

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number 000-56309

Grayscale Ethereum Classic Trust (ETC)

SPONSORED BY GRAYSCALE INVESTMENTS, LLC

(Exact Name of Registrant as Specified in Its Charter)

Delaware	82-6239281
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

c/o Grayscale Investments, LLC

290 Harbor Drive, 4thFloor

Stamford, Connecticut 06902

(Address of Principal Executive Offices) (Zip Code)

(212) 668-1427

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(g) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Grayscale Ethereum Classic Trust (ETC) Shares	ETCG	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐		Accelerated filer	☒
Non-accelerated filer	☐		Smaller reporting company	☒
			Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒

Number of Shares of the registrant outstanding as of October 28, 2024: 13,993,800

Grayscale®Ethereum classic Trust (ETC)

Table of Contents

		Page
	Forward-Looking Statements	3
	Industry and Market Data	3
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	4
	Statements of Assets and Liabilities at September 30, 2024 and December 31, 2023	4
	Schedules of Investment at September 30, 2024 and December 31, 2023	5
	Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023	6
	Statements of Changes in Net Assets for the Three and Nine Months Ended September 30, 2024 and 2023	7
	Notes to the Unaudited Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21
Item 4.	Controls and Procedures	21
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	24
GLOSSARY OF DEFINED TERMS	25
SIGNATURES	29

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains "forward-looking statements" with respect to the financial conditions, results of operations, plans, objectives, future performance and business of Grayscale Ethereum Classic Trust (ETC) (the "Trust"). Statements preceded by, followed by or that include words such as "may," "might," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of these terms and other similar expressions are intended to identify some of the forward-looking statements. All statements (other than statements of historical fact) included in this Quarterly Report that address activities, events or developments that will or may occur in the future, including such matters as changes in market prices and conditions, the Trust's operations, the plans of Grayscale Investments, LLC (the "Sponsor") and references to the Trust's future success and other similar matters are forward-looking statements. These statements are only predictions. Actual events or results may differ materially from such statements. These statements are based upon certain assumptions and analyses the Sponsor made based on its perception of historical trends, current conditions and expected future developments, as well as other factors appropriate in the circumstances. Whether or not actual results and developments will conform to the Sponsor's expectations and predictions, however, is subject to a number of risks and uncertainties, including, but not limited to, those described in "Part I, Item 1A. Risk Factors" of our Annual Report on Form 10-K and in "Part II, Item 1A. Risk Factors" herein. Forward-looking statements are made based on the Sponsor's beliefs, estimates and opinions on the date the statements are made and neither the Trust nor the Sponsor is under a duty or undertakes an obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, other than as required by applicable laws. Investors are therefore cautioned against relying on forward-looking statements.

Unless otherwise stated or the context otherwise requires, the terms "we," "our" and "us" in this Quarterly Report refer to the Sponsor acting on behalf of the Trust.

A glossary of industry and other defined terms is included in this Quarterly Report, beginning on page 25.

This Quarterly Report supplements and where applicable amends the Memorandum, as defined in the Trust's Second Amended and Restated Declaration of Trust and Trust Agreement, for general purposes.

Industry and Market Data

Although we are responsible for all disclosure contained in this Quarterly Report on Form 10-Q, in some cases we have relied on certain market and industry data obtained from third-party sources that we believe to be reliable. Market estimates are calculated by using independent industry publications in conjunction with our assumptions regarding the Ethereum Classic ("ETC") industry and market. While we are not aware of any misstatements regarding any market, industry or similar data presented herein, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the headings "Forward-Looking Statements," "Part I, Item 1A. Risk Factors" in the Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the "SEC") on February 23, 2024 (the "Annual Report"), and "Part II, Item 1A. Risk Factors" in this Quarterly Report on Form 10-Q.

PART I - FINANCIAL INFORMATION:

Item 1. Financial Statements (Unaudited)

GRAYSCALE Ethereum Classic TRUST (ETC)

STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)

(Amounts in thousands, except Share and per Share amounts)

		September 30, 2024			December 31, 2023
Assets:
Investment in ETC, at fair value (cost $85,592and $87,209as of September 30, 2024 and December 31, 2023, respectively)		$	222,952			$	253,958
Total assets		$	222,952			$	253,958
Liabilities:
Sponsor's Fee payable, related party		$	-			$	-
Total liabilities			-				-
Net assets		$	222,952			$	253,958
Shares issued and outstanding, no par value (unlimited Shares authorized)			13,993,800				13,993,800
Principal market net asset value per Share		$	15.93			$	18.15

GRAYSCALE Ethereum Classic TRUST (ETC)

SCHEDULES OFINVESTMENT (UNAUDITED)

(Amounts in thousands, except quantity of ETC and percentages)

September 30, 2024
		Quantity of ETC			Cost			Fair Value			% of Net Assets
Investment in ETC		11,334,633.90876161			$	85,592			$	222,952				100	%
Net assets					$	85,592			$	222,952				100	%
December 31, 2023
		Quantity of ETC			Cost			Fair Value			% of Net Assets
Investment in ETC			11,548,776.17230000			$	87,209			$	253,958				100	%
Net assets					$	87,209			$	253,958				100	%

GRAYSCALE Ethereum Classic TRUST (ETC)

STATEMENTS OFOPERATIONS (UNAUDITED)

(Amounts in thousands)

		Three Months Ended September 30,			Nine Months Ended September 30,
		2024			2023			2024			2023
Investment income:
Investment income		$	-			$	-			$	-			$	-
Expenses:
Sponsor's Fee, related party			1,435				1,252				5,399				4,128
Net investment loss			(1,435	)			(1,252	)			(5,399	)			(4,128	)
Net realized and unrealized (loss) gain from:
Net realized gain on investment in ETC			896				698				3,782				2,472
Net change in unrealized appreciation on investment in ETC			(45,236	)			(38,781	)			(29,389	)			5,507
Net realized and unrealized (loss) gain on investment			(44,340	)			(38,083	)			(25,607	)			7,979
Net (decrease) increase in net assets resulting from operations		$	(45,775	)		$	(39,335	)		$	(31,006	)		$	3,851

GRAYSCALE Ethereum Classic TRUST (ETC)

STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)

(Amounts in thousands, except change in Shares outstanding)

		Three Months Ended September 30,			Nine Months Ended September 30,
		2024			2023			2024			2023
(Decrease) increase in net assets from operations:
Net investment loss		$	(1,435	)		$	(1,252	)		$	(5,399	)		$	(4,128	)
Net realized gain on investment in ETC			896				698				3,782				2,472
Net change in unrealized appreciation on investment in ETC			(45,236	)			(38,781	)			(29,389	)			5,507
Net (decrease) increase in net assets resulting from operations			(45,775	)			(39,335	)			(31,006	)			3,851
Increase in net assets from capital share transactions:
Shares issued			-				-				-				-
Net increase in net assets resulting from capital share transactions			-				-				-				-
Total (decrease) increase in net assets from operations and capital share transactions			(45,775	)			(39,335	)			(31,006	)			3,851
Net assets:
Beginning of period			268,727				230,513				253,958				187,327
End of period		$	222,952			$	191,178			$	222,952			$	191,178
Change in Shares outstanding:
Shares outstanding at beginning of period			13,993,800				13,993,800				13,993,800				13,993,800
Shares issued			-				-				-				-
Net increase in Shares			-				-				-				-
Shares outstanding at end of period			13,993,800				13,993,800				13,993,800				13,993,800

GRAYSCALE Ethereum Classic TRUST (ETC)

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

Item 2. Management's Discussion and Analysis ofFinancial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read together with, and is qualified in its entirety by reference to, our unaudited financial statements and related notes included elsewhere in this Quarterly Report, which have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). The following discussion may contain forward-looking statements based on assumptions we believe to be reasonable. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those set forth under "Part II, Item 1A. Risk Factors" in this Quarterly Report, or in "Part I, Item 1A. Risk Factors" and "Forward-Looking Statements" or other sections of our Annual Report on Form 10-K for the year ended December 31, 2023.

Trust Overview

The Trust is a passive entity that is managed and administered by the Sponsor and does not have any officers, directors or employees. The Trust holds ETC and, from time to time on a periodic basis, issues Creation Baskets in exchange for deposits of ETC. As a passive investment vehicle, the Trust's investment objective is for the value of the Shares (based on ETC per Share) to reflect the value of ETC held by the Trust, determined by reference to the Index Price, less the Trust's expenses and other liabilities. While an investment in the Shares is not a direct investment in ETC, the Shares are designed to provide investors with a cost-effective and convenient way to gain investment exposure to ETC. To date, the Trust has not met its investment objective and the Shares quoted on OTCQX have not reflected the value of ETC held by the Trust, less the Trust's expenses and other liabilities, but instead have traded at both premiums and discounts to such value, which at times have been substantial. The Trust is not managed like a business corporation or an active investment vehicle.

Critical Accounting Policies and Estimates

Investment Transactions and Revenue Recognition

The Trust considers investment transactions to be the receipt of ETC for Share creations and the delivery of ETC for Share redemptions or for payment of expenses in ETC. At this time, the Trust is not accepting redemption requests from shareholders. The Trust records its investment transactions on a trade date basis and changes in fair value are reflected as net change in unrealized appreciation or depreciation on investments. Realized gains and losses are calculated using the specific identification method. Realized gains and losses are recognized in connection with transactions including settling obligations for the Sponsor's Fee in ETC.

Principal Market and Fair Value Determination

To determine which market is the Trust's principal market (or in the absence of a principal market, the most advantageous market) for purposes of calculating the Trust's net asset value in accordance with U.S. GAAP ("Principal Market NAV"), the Trust follows Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 820-10, Fair Value Measurement, which outlines the application of fair value accounting. ASC 820-10 determines fair value to be the price that would be received for ETC in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires the Trust to assume that ETC is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact.

The Trust only receives ETC in connection with a creation order from the Authorized Participant (or a Liquidity Provider) and does not itself transact on any Digital Asset Markets. Therefore, the Trust looks to market-based volume and level of activity for Digital Asset Markets. The Authorized Participant(s), or a Liquidity Provider, may transact in a Brokered Market, a Dealer Market, Principal-to-Principal Markets and Exchange Markets (referred to as "Trading Platform Markets" in this Quarterly Report), each as defined in the FASB ASC Master Glossary (collectively, "Digital Asset Markets").

In determining which of the eligible Digital Asset Markets is the Trust's principal market, the Trust reviews these criteria in the following order:

The Trust determines its principal market (or in the absence of a principal market the most advantageous market) annually and conducts a quarterly analysis to determine (i) if there have been recent changes to each Digital Asset Market's trading volume and level of activity in the trailing twelve months, (ii) if any Digital Asset Markets have developed that the Trust has access to, or (iii) if recent changes to each Digital Asset Market's price stability have occurred that would materially impact the selection of the principal market and necessitate a change in the Trust's determination of its principal market.

The cost basis of ETC received in connection with a creation order is recorded by the Trust at the fair value of ETC at 4:00 p.m., New York time, on the creation date for financial reporting purposes. The cost basis recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of the corresponding Shares to investors.

Investment Company Considerations

The Trust is an investment company for U.S. GAAP purposes and follows accounting and reporting guidance in accordance with the FASB ASC Topic 946, Financial Services-Investment Companies. The Trust uses fair value as its method of accounting for ETC in accordance with its classification as an investment company for accounting purposes. The Trust is not a registered investment company under the Investment Company Act of 1940. U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates and these differences could be material.

Review of Financial Results (unaudited)

Financial Highlights for the Three and Nine Months Ended September 30, 2024 and 2023

(All amounts in the following table and the subsequent paragraphs, except Share, per Share, ETC and price of ETC amounts, are in thousands)

		Three Months Ended September 30,			Nine Months Ended September 30,
		2024			2023			2024			2023
Net realized and unrealized (loss) gain on investment in ETC		$	(44,340	)		$	(38,083	)		$	(25,607	)		$	7,979
Net (decrease) increase in net assets resulting from operations		$	(45,775	)		$	(39,335	)		$	(31,006	)		$	3,851
Net assets(1)		$	222,952			$	191,178			$	222,952			$	191,178

Net realized and unrealized loss on investment in ETC for the three months ended September 30, 2024 was ($44,340), which includes a realized gain of $896 on the transfer of ETC to pay the Sponsor's Fee and net change in unrealized appreciation on investment in ETC of ($45,236). Net realized and unrealized loss on investment in ETC for the period was driven by ETC price depreciation from $23.56 per ETC as of June 30, 2024, to $19.67 per ETC as of September 30, 2024. Net decrease in net assets resulting from operations was ($45,775) for the three months ended September 30, 2024, which consisted of the net realized and unrealized loss on investment in ETC, plus the Sponsor's Fee of $1,435. Net assets decreased to $222,952 at September 30, 2024, a 17% decrease for the three-month period. The decrease in net assets resulted from the aforementioned ETC price depreciation and the withdrawal of approximately 71,455 ETC to pay the foregoing Sponsor's Fee.

Net realized and unrealized loss on investment in ETC for the three months ended September 30, 2023 was ($38,083), which includes a realized gain of $698 on the transfer of ETC to pay the Sponsor's Fee and net change in unrealized appreciation on investment in ETC of ($38,781). Net realized and unrealized loss on investment in ETC for the period was driven by ETC price depreciation from $19.71 per ETC as of June 30, 2023, to $16.45 per ETC as of September 30, 2023. Net decrease in net assets resulting from operations was ($39,335) for the three months ended September 30, 2023, which consisted of the net realized and unrealized loss on investment in ETC, plus the Sponsor's Fee of $1,252. Net assets decreased to $191,178 at September 30, 2023, a 17% decrease for the three-month period. The decrease in net assets resulted from the aforementioned ETC price depreciation and the withdrawal of approximately 73,466 ETC to pay the foregoing Sponsor's Fee.

Net realized and unrealized loss on investment in ETC for the nine months ended September 30, 2024 was ($25,607), which includes a realized gain of $3,782 on the transfer of ETC to pay the Sponsor's Fee and net change in unrealized appreciation on investment in ETC of ($29,389). Net realized and unrealized loss on investment in ETC for the period was driven by ETC price depreciation from $21.99 per ETC as of December 31, 2023, to $19.67 per ETC as of September 30, 2024. Net decrease in net assets resulting from operations was ($31,006) for the nine months ended September 30, 2024, which consisted of the net realized and unrealized loss on investment in ETC, plus the Sponsor's Fee of $5,399. Net assets decreased to $222,952 at September 30, 2024, a 12% decrease for the nine-month period. The decrease in net assets resulted from the aforementioned ETC price depreciation and the withdrawal of approximately 214,142 ETC to pay the foregoing Sponsor's Fee.

Net realized and unrealized gain on investment in ETC for the nine months ended September 30, 2023 was $7,979, which includes a realized gain of $2,472 on the transfer of ETC to pay the Sponsor's Fee and net change in unrealized appreciation on investment in ETC of $5,507. Net realized and unrealized gain on investment in ETC for the period was driven by ETC price appreciation from $15.82 per ETC as of December 31, 2022, to $16.45 per ETC as of September 30, 2023. Net increase in net assets resulting from operations was $3,851 for the nine months ended September 30, 2023, which consisted of the net realized and unrealized gain on investment in ETC, less the Sponsor's Fee of $4,128. Net assets increased to $191,178 at September 30, 2023, a 2% increase for the nine-month period. The increase in net assets resulted from the aforementioned ETC price appreciation, partially offset by the withdrawal of approximately 219,363 ETC to pay the foregoing Sponsor's Fee.

Cash Resources and Liquidity

The Trust has not had a cash balance at any time since inception. When selling ETC, Incidental Rights and/or IR Virtual Currency in the Digital Asset Market to pay Additional Trust Expenses on behalf of the Trust, the Sponsor endeavors to sell the exact amount of ETC, Incidental Rights and/or IR Virtual Currency needed to pay expenses in order to minimize the Trust's holdings of assets other than ETC. As a consequence, the Sponsor expects that the Trust will not record any cash flow from its operations and that its cash balance will be zero at the end of each reporting period. Furthermore, the Trust is not a party to any off-balance sheet arrangements.

In exchange for the Sponsor's Fee, the Sponsor has agreed to assume most of the expenses incurred by the Trust. As a result, the only ordinary expense of the Trust during the periods covered by this Quarterly Report was the Sponsor's Fee. The Trust is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to its liquidity needs.

Selected Operating Data

		Three Months Ended September 30,			Nine Months Ended September 30,
		2024			2023			2024			2023
		(All ETC balances are rounded to the nearest whole ETC)
ETC:
Opening balance			11,406,089				11,695,248				11,548,776				11,841,145
Creations			-				-				-				-
Sponsor's Fee, related party			(71,455	)			(73,466	)			(214,142	)			(219,363	)
Closing balance			11,334,634				11,621,782				11,334,634				11,621,782
Accrued but unpaid Sponsor's Fee, related party			-				-				-				-
Net closing balance			11,334,634				11,621,782				11,334,634				11,621,782
Number of Shares:
Opening balance			13,993,800				13,993,800				13,993,800				13,993,800
Creations			-				-				-				-
Closing balance			13,993,800				13,993,800				13,993,800				13,993,800

		As of September 30,
		2024			2023
Price of ETC on principal market(1)		$	19.67			$	16.45
Principal Market NAV per Share(2)		$	15.93			$	13.66
Index Price		$	19.69			$	16.43
NAV per Share(3)		$	15.95			$	13.65

For accounting purposes, the Trust reflects creations and the ETC receivable with respect to such creations on the date of receipt of a notification of a creation but does not issue Shares until the requisite amount of ETC is received. At this time, the Trust is not accepting redemption requests from shareholders. Subject to receipt of regulatory approval from the SEC and approval by the Sponsor in its sole discretion, the Trust may in the future operate a redemption program. The Trust currently has no intention of seeking regulatory approval to operate an ongoing redemption program.

As of September 30, 2024, the Trust had a net closing balance with a value of $223,178,942, based on the Index Price (non-GAAP methodology). As of September 30, 2024, the Trust had a total market value of $222,952,249, based on the Digital Asset Market price of ETC on the Trust's principal market (Coinbase).

As of September 30, 2023, the Trust had a net closing balance with a value of $190,945,871, based on the Index Price (non-GAAP methodology). As of September 30, 2023, the Trust had a total market value of $191,178,306, based on the Digital Asset Market price of ETC on the Trust's principal market (Coinbase).

Historical NAV and ETC Prices

As movements in the price of ETC will directly affect the price of the Shares, investors should understand recent movements in the price of ETC. Investors, however, should also be aware that past movements in the ETC price are not indicators of future movements. Movements may be influenced by various factors, including, but not limited to, government regulation, security breaches experienced by service providers, as well as political and economic uncertainties around the world.

The following chart illustrates the movement in the Trust's NAV per Share versus the Index Price and the Trust's Principal Market NAV per Share from April 24, 2017 to September 30, 2024. For more information on the determination of the Trust's NAV, see "Item 1. Business-Overview of the ETC Industry and Market-ETC Value-The Index and the Index Price" in the Trust's Annual Report on Form 10-K.

The following table illustrates the movements in the Index Price from October 1, 2019 to September 30, 2024. During such period, the Index Price has ranged from $3.43 to $148.63, with the straight average being $22.90 through September 30, 2024. The Sponsor has not observed a material difference between the Index Price and average prices from the constituent Digital Asset Trading Platforms individually or as a group.

					High		Low
Period		Average			Index Price			Date		Index Price			Date		End of period			Last business day
Twelve months ended September 30, 2020		$	6.20			$	12.31			1/29/2020		$	3.43			12/17/2019		$	5.72			$	5.72
Twelve months ended September 30, 2021		$	31.51			$	148.63			5/6/2021		$	4.86			11/3/2020		$	46.65			$	46.65
Twelve months ended September 30, 2022		$	33.94			$	62.02			11/9/2021		$	12.80			6/18/2022		$	27.64			$	27.64
Twelve months ended September 30, 2023		$	19.40			$	27.94			10/6/2022		$	14.52			9/11/2023		$	16.43			$	15.88
Twelve months ended September 30, 2024		$	23.51			$	38.44			3/8/2024		$	14.75			10/12/2023		$	19.69			$	19.69
October 1, 2019 to September 30, 2024		$	22.90			$	148.63			5/6/2021		$	3.43			12/17/2019		$	19.69			$	19.69

The following table illustrates the movements in the Digital Asset Market price of ETC, as reported on the Trust's principal market, from October 1, 2019 to September 30, 2024. During such period, the price of ETC has ranged from $3.43 to $148.51, with the straight average being $22.93 through September 30, 2024.

					High		Low
Period		Average			Digital Asset Market Price			Date		Digital Asset Market Price			Date		End of period			Last business day
Twelve months ended September 30, 2020		$	6.22			$	12.33			2/5/2020		$	3.43			12/17/2019		$	5.72			$	5.72
Twelve months ended September 30, 2021		$	31.61			$	148.51			5/6/2021		$	4.86			11/3/2020		$	46.59			$	46.59
Twelve months ended September 30, 2022		$	33.96			$	62.08			11/9/2021		$	12.77			6/18/2022		$	27.63			$	27.63
Twelve months ended September 30, 2023		$	19.40			$	27.94			10/6/2022		$	14.53			9/11/2023		$	16.45			$	15.87
Twelve months ended September 30, 2024		$	23.51			$	38.47			3/8/2024		$	14.73			10/12/2023		$	19.67			$	19.67
October 1, 2019 to September 30, 2024		$	22.93			$	148.51			5/6/2021		$	3.43			12/17/2019		$	19.67			$	19.67

The following chart sets out the historical closing prices for the Shares as reported by OTCQX and the Trust's NAV per Share from May 10, 2018 to September 30, 2024.

ETCG Premium/(Discount): ETCG Share Price vs. NAV per Share (Non-GAAP) ($)

The following chart sets out the historical premium and discount for the Shares as reported by OTCQX and the Trust's NAV per Share from May 10, 2018 to September 30, 2024.

ETCG Premium/(Discount): ETCG Share Price vs. NAV per Share (Non-GAAP) (%)

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Trust Agreement does not authorize the Trust to borrow for payment of the Trust's ordinary expenses. The Trust does not engage in transactions in foreign currencies which could expose the Trust or holders of Shares to any foreign currency related market risk. The Trust does not invest in derivative financial instruments and has no foreign operations or long-term debt instruments.

Item 4. Controlsand Procedures

The Trust maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Principal Executive Officer and Principal Financial and Accounting Officer of the Sponsor, and to the audit committee of the board of directors of the Sponsor, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of the Principal Executive Officer and the Principal Financial and Accounting Officer of the Sponsor, the Sponsor conducted an evaluation of the Trust's disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e). Based on this evaluation, the Principal Executive Officer and the Principal Financial and Accounting Officer of the Sponsor concluded that the Trust's disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

There was no change in the Trust's internal controls over financial reporting that occurred during the Trust's most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, these internal controls.

PART II - OTHER INFORMATION:

Item 1. LegalProceedings

The Sponsor and an affiliate of the Trust, Grayscale Bitcoin Trust (BTC) ("Grayscale Bitcoin Trust"), are currently parties to certain legal proceedings. Although the Trust is not a party to these proceedings, the Trust may in the future be subject to legal proceedings or disputes.

On January 30, 2023, Osprey Funds, LLC ("Osprey") filed a suit in Connecticut Superior Court against the Sponsor alleging that statements the Sponsor made in its advertising and promotion of Grayscale Bitcoin Trust violated the Connecticut Unfair Trade Practices Act, and seeking statutory damages and injunctive relief. On April 17, 2023, the Sponsor filed a motion to dismiss the complaint and, following briefing, a hearing on the motion to dismiss was held on June 26, 2023. On October 23, 2023, the Court denied the Sponsor's motion to dismiss. On November 6, 2023, the Sponsor filed a motion for reargument of the Court's order denying the Sponsor's motion to dismiss. On November 16, 2023, Osprey filed an opposition to the Sponsor's motion for reargument, and on November 30, 2023, the Sponsor filed a reply in further support of its motion for reargument. On March 11, 2024, the Court denied the Sponsor's motion for reargument. On March 25, 2024, the Sponsor filed an application for interlocutory appeal. On March 28, 2024, Osprey filed an opposition to the Sponsor's application for interlocutory appeal. On April 1, 2024, the Court denied the Sponsor's application for interlocutory appeal. On April 10, 2024, Osprey filed a motion to amend the complaint. The amended complaint went into effect on April 25, 2024. A scheduling order was entered by the Court with trial scheduled to begin on July 15, 2025. On July 31, 2024, the Sponsor filed a motion to strike the amended complaint. On August 30, 2024, Osprey filed an opposition to the Sponsor's motion to strike the amended complaint. On October 11, 2024, the Court denied the Sponsor's motion to strike. The Sponsor and Grayscale Bitcoin Trust believe this lawsuit is without merit and intend to vigorously defend against it.

As of the date of this Quarterly Report, the Sponsor does not expect the foregoing proceedings to have a material adverse effect on the Trust's business, financial condition or results of operations.

The Sponsor and/or the Trust may be subject to additional legal proceedings and disputes in the future.

Item 1A. Risk Factors

There have been no material changes to the Risk Factors last reported under "Part I, Item 1A. Risk Factors" of the registrant's Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of equity securities by the issuer and affiliated purchasers -The table below sets forth information regarding open market purchases of Shares of Grayscale Ethereum Classic Trust (ETC) (OTCQX: ETCG) by DCG, the indirect parent company of the Sponsor, on a monthly basis during the three months ended September 30, 2024:

Period		(a) Total Number of Shares of ETCG Purchased			(b) Average Price Paid per Share of ETCG			(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1)			(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(1)
											(in millions)
July 1, 2024 - July 31, 2024			-			$	-				-			$	204.7
August 1, 2024 - August 31, 2024			-				-				-				204.7
September 1, 2024 - September 30, 2024			-				-				-				204.7
Total			-			$	-				-			$	204.7

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit Number	Exhibit Description
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended, with respect to the Trust's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.
31.2	Certification of Principal Financial and Accounting Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended, with respect to the Trust's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.
32.1	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to the Trust's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.
32.2	Certification of Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to the Trust's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.
101.INS*	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.
104	Cover Page Interactive Data File-The cover page interactive data file does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

*	Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

Glossary of Defined Terms

"Actual Exchange Rate"-With respect to any particular asset, at any time, the price per single unit of such asset (determined net of any associated fees) at which the Trust is able to sell such asset for U.S. dollars (or other applicable fiat currency) at such time to enable the Trust to timely pay any Additional Trust Expenses, through use of the Sponsor's commercially reasonable efforts to obtain the highest such price.

"Additional Trust Expenses"-Together, any expenses incurred by the Trust in addition to the Sponsor's Fee that are not Sponsor-paid Expenses, including, but not limited to, (i) taxes and governmental charges, (ii) expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Trust to protect the Trust or the interests of shareholders (including in connection with any Incidental Rights and any IR Virtual Currency), (iii) any indemnification of the Custodian or other agents, service providers or counterparties of the Trust, (iv) the fees and expenses related to the listing, quotation or trading of the Shares on any Secondary Market (including legal, marketing and audit fees and expenses) to the extent exceeding $600,000 in any given fiscal year and (v) extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters.

"Administrator Fee"-The fee payable to any administrator of the Trust for services it provides to the Trust, which the Sponsor will pay such administrator as a Sponsor-paid Expense.

"Agent"-A Person appointed by the Trust to act on behalf of the shareholders in connection with any distribution of Incidental Rights and/or IR Virtual Currency.

"Authorized Participant"-Certain eligible financial institutions that have entered into an agreement with the Trust and the Sponsor concerning the creation of Shares. Each Authorized Participant (i) is a registered broker-dealer, (ii) has entered into a Participant Agreement with the Sponsor and (iii) owns a digital wallet address that is known to the Custodian as belonging to the Authorized Participant or a Liquidity Provider.

"Basket"-A block of 100 Shares.

"Basket Amount"-On any trade date, the amount of ETC required as of such trade date for each Creation Basket, as determined by dividing (x) the amount of ETC owned by the Trust at 4:00 p.m., New York time, on such trade date, after deducting the amount of ETC representing the U.S. dollar value of accrued but unpaid fees and expenses of the Trust (converted using the Index Price at such time, and carried to the eighth decimal place), by (y) the number of Shares outstanding at such time (with the quotient so obtained calculated to one one-hundred-millionth of one ETC (i.e., carried to the eighth decimal place)), and multiplying such quotient by 100.

"Blockchain" or "Ethereum Classic Blockchain"-The public transaction ledger of the Ethereum Classic Network on which transactions in ETC are recorded.

"Creation Basket"-Basket of Shares issued by the Trust in exchange for deposits of the Basket Amount required for each such Creation Basket.

"Custodial Services"-The Custodian's services that (i) allow ETC to be deposited from a public blockchain address to the Trust's Digital Asset Account and (ii) allow the Trust and the Sponsor to withdraw ETC from the Trust's Digital Asset Account to a public blockchain address the Trust or the Sponsor controls pursuant to instructions the Trust or the Sponsor provides to the Custodian.

"Custodian"-Coinbase Custody Trust Company, LLC.

"Custodian Agreement"-The Amended and Restated Custodial Services Agreement, dated as of June 29, 2022, by and between the Trust and the Sponsor and Custodian that governs the Trust's and the Sponsor's use of the Custodial Services provided by the Custodian as a fiduciary with respect to the Trust's assets.

"Custodian Fee"-Fee payable to the Custodian for services it provides to the Trust, which the Sponsor shall pay to the Custodian as a Sponsor-paid Expense.

"DCG"-Digital Currency Group, Inc.

"Digital Asset Account"-A segregated custody account controlled and secured by the Custodian to store private keys, which allow for the transfer of ownership or control of the Trust's ETC on the Trust's behalf.

"Digital Asset Market"-A "Brokered Market," "Dealer Market," "Principal-to-Principal Market" or "Exchange Market" (referred to as "Trading Platform Market" in this Quarterly Report), as each such term is defined in the Financial Accounting Standards Board Accounting Standards Codification Master Glossary.

"Digital Asset Trading Platform"-An electronic marketplace where trading platform participants may trade, buy and sell ETC based on bid-ask trading. The largest Digital Asset Trading Platforms are online and typically trade on a 24-hour basis, publishing transaction price and volume data.

"Digital Asset Trading Platform Market"-The global trading platform market for the trading of ETC, which consists of transactions on electronic Digital Asset Trading Platforms.

"DSTA"-The Delaware Statutory Trust Act, as amended.

"DTC"-The Depository Trust Company. DTC is a limited purpose trust company organized under New York law, a member of the U.S. Federal Reserve System and a clearing agency registered with the SEC. DTC will act as the securities depository for the Shares.

"ETC" or "Ethereum Classic"-Ether Classic tokens, which are a type of digital asset based on an open-source cryptographic protocol existing on the Ethereum Classic Network, comprising units that constitute the assets underlying the Trust's Shares.

"Ethereum Classic Network"-The online, end-user-to-end-user network hosting the public transaction ledger, known as the Ethereum Classic Blockchain, and the source code comprising the basis for the cryptographic and algorithmic protocols governing the Ethereum Classic Network. See "Item 1. Business-Overview of the ETC Industry and Market" in our Annual Report.

"Exchange Act"-The Securities Exchange Act of 1934, as amended.

"FINRA"-The Financial Industry Regulatory Authority, Inc., which is the primary regulator in the United States for broker-dealers, including Authorized Participants.

"Grayscale Securities"-Grayscale Securities, LLC, a wholly owned subsidiary of the Sponsor, which as of the date of this Quarterly Report, is the only acting Authorized Participant.

"Incidental Rights"-Rights to acquire, or otherwise establish dominion and control over, any virtual currency or other asset or right, which rights are incident to the Trust's ownership of ETC and arise without any action of the Trust, or of the Sponsor or Trustee on behalf of the Trust.

"Index"-The CoinDesk Ether Classic Price Index (ECX).

"Index License Agreement"-The license agreement, dated as of February 1, 2022, between the Index Provider and the Sponsor governing the Sponsor's use of the Index for calculation of the Index Price, as amended by Amendment No. 1 thereto and as the same may be amended from time to time.

"Index Price"-The U.S. dollar value of an ETC derived from the Digital Asset Trading Platforms that are reflected in the Index, calculated at 4:00 p.m., New York time, on each business day. See "Item 1. Business-Overview of the ETC Industry and Market-ETC Value-The Index and the Index Price" in our Annual Report for a description of how the Index Price is calculated. For purposes of the Trust Agreement, the term ETC Index Price shall mean the Index Price as defined herein.

"Index Provider"-CoinDesk Indices, Inc., a Delaware corporation that publishes the Index. Prior to its sale to an unaffiliated third party on November 20, 2023, DCG was the indirect parent company of CoinDesk Indices, Inc. As a result, CoinDesk Indices, Inc. was an affiliate of the Sponsor and the Trust and was considered a related party of the Trust.

"Investment Advisers Act"-Investment Advisers Act of 1940, as amended.

"Investment Company Act"-Investment Company Act of 1940, as amended.

"Investor"-Any investor that has entered into a subscription agreement with an Authorized Participant, pursuant to which such Authorized Participant will act as agent for the investor.

"IR Virtual Currency"-Any virtual currency tokens, or other asset or right, acquired by the Trust through the exercise (subject to the applicable provisions of the Trust Agreement) of any Incidental Right.

"Liquidity Provider"-A service provider that facilitates the purchase of ETC in connection with the creation of Baskets.

"Marketing Fee"-Fee payable to the marketer for services it provides to the Trust, which the Sponsor will pay to the marketer as a Sponsor-paid Expense.

"NAV"-The aggregate value, expressed in U.S. dollars, of the Trust's assets (other than U.S. dollars or other fiat currency), less its liabilities (which include estimated accrued but unpaid fees and expenses), a Non-GAAP metric, calculated in the manner set forth under "Item 1. Business-Valuation of ETC and Determination of NAV" in our Annual Report. See also "Item 1. Business-Investment Objective" in our Annual Report for a description of the Trust's Principal Market NAV, as calculated in accordance with U.S. GAAP. Prior to February 23, 2024, NAV was referred to as Digital Asset Holdings. For purposes of the Trust Agreement, the term ETC Holdings shall mean the NAV as defined herein.

"NAV Fee Basis Amount"-The amount on which the Sponsor's Fee for the Trust is based, as calculated in the manner set forth under "Item 1. Business-Valuation of ETC and Determination of NAV" in our Annual Report. For purposes of the Trust Agreement, the term ETC Holdings Fee Basis Amount shall mean the NAV Fee Basis Amount as defined herein.

"OTCQX"-The OTCQX Best Market®of OTC Markets Group Inc.

"Participant Agreement"-An agreement entered into by an Authorized Participant with the Sponsor that provides the procedures for the creation of Baskets and for the delivery of ETC required for Creation Baskets.

"Principal Market NAV"-The net asset value of the Trust determined on a U.S. GAAP basis. Prior to February 23, 2024, Principal Market NAV was referred to as NAV.

"SEC"-The U.S. Securities and Exchange Commission.

"Secondary Market"-Any marketplace or other alternative trading system, as determined by the Sponsor, on which the Shares may then be listed, quoted or traded, including but not limited to, the OTCQX Best Market®of OTC Markets Group Inc.

"Securities Act"-The Securities Act of 1933, as amended.

"Shares"-Common units of fractional undivided beneficial interest in, and ownership of, the Trust.

"Sponsor"-Grayscale Investments, LLC.

"Sponsor-paid Expenses"-The fees and expenses incurred by the Trust in the ordinary course of its affairs that the Sponsor is obligated to assume and pay, excluding taxes, but including: (i) the Marketing Fee, (ii) the Administrator Fee, (iii) the Custodian Fee and fees for any other security vendor engaged by the Trust, (iv) the Transfer Agent fee, (v) the Trustee fee, (vi) the fees and expenses related to the listing, quotation or trading of the Shares on any Secondary Market (including customary legal, marketing and audit fees and expenses) in an amount up to $600,000 in any given fiscal year, (vii) ordinary course, legal fees and expenses, (viii) audit fees, (ix) regulatory fees, including, if applicable, any fees relating to the registration of the Shares under the Securities Act or the Exchange Act, (x) printing and mailing costs, (xi) costs of maintaining the Trust's website and (xii) applicable license fees.

"Sponsor's Fee"-A fee, payable in ETC, which accrues daily in U.S. dollars at an annual rate of 2.5% of the NAV Fee Basis Amount of the Trust as of 4:00 p.m., New York time, on each day; providedthat for a day that is not a business day, the calculation of the Sponsor's Fee will be based on the NAV Fee Basis Amount from the most recent business day, reduced by the accrued and unpaid Sponsor's Fee for such most recent business day and for each day after such most recent business day and prior to the relevant calculation date.

"Transfer Agent"-Continental Stock Transfer & Trust Company, a Delaware corporation.

"Transfer Agent Fee"-Fee payable to the Transfer Agent for services it provides to the Trust, which the Sponsor will pay to the Transfer Agent as a Sponsor-paid Expense.

"Trust"-Grayscale Ethereum Classic Trust (ETC), a Delaware statutory trust, formed on April 18, 2017 under the DSTA and pursuant to the Trust Agreement.

"Trust Agreement"-The Second Amended and Restated Declaration of Trust and Trust Agreement between the Trustee and the Sponsor establishing and governing the operations of the Trust, as amended by Amendments No. 1, No. 2, No. 3 and No. 4 thereto and as the same may be amended from time to time.

"Trustee"-CSC Delaware Trust Company (formerly known as Delaware Trust Company), a Delaware trust company, is the Delaware trustee of the Trust.

"U.S."-United States.

"U.S. dollar" or "$"-United States dollar or dollars.

"U.S. GAAP"-United States generally accepted accounting principles.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned in the capacities* indicated, thereunto duly authorized.

		Grayscale Investments, LLC as Sponsor of Grayscale Ethereum Classic Trust (ETC)

		By:	/s/ Peter Mintzberg
			Name:	Peter Mintzberg
			Title:	Member of the Board of Directors and Chief Executive Officer (Principal Executive Officer)*
		By:	/s/ Edward McGee
			Name:	Edward McGee
			Title:	Member of the Board of Directors and Chief Financial Officer (Principal Financial and Accounting Officer)*

Date: November 1, 2024

* The Registrant is a trust and the persons are signing in their capacities as officers or directors of Grayscale Investments, LLC, the Sponsor of the Registrant.

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