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CORRESP
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CORRESP

 Dan Gibbons

 +1 212
450 3222

 dan.gibbons@davispolk.com

 Davis Polk & Wardwell LLP

450 Lexington Avenue

 New York, NY
10017

 davispolk.com

 April 19, 2024

Re:
 Grayscale Ethereum Trust (ETH)

Preliminary Proxy Statement on Schedule 14A

Filed March 19, 2024

 File
No. 000-56193

 Jessica Livingston

 Sandra Hunter Berkheimer

 Division of Corporation Finance

 Office of Crypto Assets

 U.S. Securities and Exchange Commission

 100 F Street, N.E.

 Washington, D.C. 20549

 Dear Ms. Livingston and
Ms. Berkheimer:

 On behalf of our client, Grayscale Investments, LLC, a Delaware limited liability company and the sponsor (the “Sponsor”)
of Grayscale Ethereum Trust (ETH) (the “Trust”), this letter sets forth the Sponsor’s responses to the comment letter of the staff (the “Staff”) of the Division of Corporation Finance of the Securities and Exchange
Commission (the “Commission”) dated April 8, 2024, relating to the Trust’s preliminary proxy statement on Schedule 14A (the “Preliminary Proxy Statement”). The Trust has revised the Preliminary Proxy Statement and is
filing Amendment No. 1 to the Preliminary Proxy Statement (the “Amended Preliminary Proxy Statement”) together with this response letter.

For your convenience, we have reproduced the Staff’s comments preceding the Sponsor’s responses below. All capitalized terms used and not defined
herein shall have the meaning given to them in the Amended Preliminary Proxy Statement or the Second Amended and Restated Declaration of Trust and Trust Agreement (the “Trust Agreement”) attached as an exhibit thereto, for which the Trust
is soliciting the consent of Shareholders to execute.

 Preliminary Proxy Statement on Schedule 14A filed March 19, 2024

Proposal 2, page 8

1.
 Please refer to your proposal on staking and staking consideration and address the following:

•

 Tell us and revise your consent solicitation to describe your staking plans and the timelines for when you
will begin participating in staking, including the means by which you would stake your ether (e.g., running your own validator node or delegating to a third-party).

•

 Revise your consent solicitation to include a more fulsome discussion of the material risks to the Trust and
its shareholders associated with staking, including those relating to the means by which you would stake your ether.

•

 Revise your consent solicitation to describe the “certain conditions” and “certain
requirements” that must be satisfied in order for the Trust to engage in staking and how the Trust will ensure that there is sufficient certainty that those conditions and requirements can be met.

•

 Considering the exchange’s pending listing standard application under Rule 19b-4 to convert the Trust to
a spot ether exchange-traded product and the reference in your proposal to maintaining parity with any similarly situated investment products that provide for the staking of ether, advise whether you plan to wait until that conversion is completed
and trading on an exchange has commenced to begin staking.

 Response

The Sponsor has addressed each of the Staff’s comments as follows:

•

 Tell us and revise your consent solicitation to describe your staking plans and the timelines for when you
will begin participating in staking, including the means by which you would stake your ether (e.g., running your own validator node or delegating to a third-party).

The Sponsor advises the Staff that the overall goal of the Trust is to preserve the value of the Trust’s assets and provide investors
with economic exposure that is as nearly as possible the same as the economic exposure the investor could have if it held the underlying Ether directly. Given the ease with which direct holders of Ether may engage in staking, the Sponsor advises the
Staff that it believes a significant amount of the circulating supply of Ether is already being staked, and the Sponsor expects the proportion of staked Ether to continue to increase over time. In addition, the regular creation of new Ether as block
rewards (all else being equal) creates inflationary pressure on the value of each existing Ether. The Sponsor believes that the combination of these two factors could effectively operate to reduce the relative value of Ether holdings which are not
staked.

 Accordingly, the Sponsor would seek to preserve the value of the Trust Estate for the benefit of the Shareholders via the
Trust’s entry into arrangements to stake a portion of the Trust’s Ether and receive staking rewards, provided that such arrangements are consistent with the continued qualification of the Trust as a grantor trust for U.S. federal income
tax purposes.

 All Shareholders would share in staking rewards received by the Trust in strict proportion to their ownership of Shares.
The Sponsor additionally advises the Staff that the Trust intends to stake only Ether tokens, and does not intend to stake any other digital assets.

The Sponsor describes its current staking plans for the Trust in more detail below.

Staking Arrangements and Provider-Facilitated Staking Model

If and when the Staking Condition is satisfied, the Sponsor anticipates that the Trust will enter into written arrangements (the “Staking
Arrangements”) with Coinbase Custody Trust Company, LLC (the “Custodian”) and one or more third party staking service providers (each, a “Staking Provider”), which may be affiliates of the Custodian or other trusted
institutional validators, to stake the Trust’s Ether through a Staking Provider’s validator software and associated hardware designed to allow a holder of Ether to participate in the validation process on the Ethereum Network
(“Provider-Facilitated Staking”). The Sponsor anticipates that the Trust’s Ether will be staked exclusively by means of Provider-Facilitated Staking.

April 19, 2024

2

 The Staking Provider will be the node operator and will be obligated to operate the
validators through which the Trust’s Ether is staked to ensure that validation occurs. The Staking Provider would stake the Trust’s Ether directly from the Trust’s wallets administered by the Custodian and perform any related
validation activities, and the Trust will retain control of its staked Ether, retaining the ability to un-stake its Ether from the applicable smart contract . The Trust’s Ether will therefore not be commingled with the Ether of any other Ether
holder, either with respect to the particular wallet that controls it or the validator that utilizes it, including the Staking Provider or the Staking Provider’s other customers and would not be controllable by any entity other than the Trust
even when staked. The Trust will not itself undertake any validation activities, and the Sponsor will not be required to perform any services. Moreover, the Sponsor will not be required to make any decisions or take any actions, other than
(i) selecting the Staking Providers and entering into the corresponding Staking Arrangements, and (ii) determining, from time to time, what portion of the Trust’s Ether tokens to stake and un-stake, and informing the Staking Providers
of those determinations.

 The Sponsor anticipates that it will instruct a Staking Provider to stake the substantial majority of the
Trust’s Ether at all times. The Trust’s Ether would be un-staked (or not staked in the first instance) only (i) as necessary to pay the Sponsor’s Fee, (ii) to pay any additional Trust expenses, (iii) to be able to
satisfy existing and reasonably foreseen potential redemption requests (assuming the Trust is then permitted to operate an ongoing redemption program), (iv) to reduce the Ether obtained by the Trust as staking consideration to cash for
distribution at regular intervals, (v) if the Sponsor determines that staking raises significant governmental, policy or regulatory concerns, (vi) if the Sponsor determines there exist vulnerabilities in the source code or cryptography
underlying the Ethereum Network, (vii) if the Custodian or Staking Provider discontinues their arrangements with the Trust, (viii) if the Sponsor otherwise determines that continued staking of such portion of the Trust’s assets would
be inconsistent with the Trust’s purpose of protecting and preserving the value of the Trust Estate, or (ix) in accordance with any other exception that is expressly contemplated by an opinion or ruling that satisfies the Staking
Condition. Ether received by the Trust in connection with the creation of new Shares, or as staking rewards, must also be staked upon receipt by the Trust, except as required to not be staked in the first instance pursuant to the exceptions
described in clauses (i)-(ix) above. Moreover, any staked Ether which must be un-staked in order to fulfill a distribution in connection with a redemption (to the extent such distribution cannot be fulfilled utilizing the portion of the
Trust’s Ether that has not been staked) will be un-staked only after the redemption request is approved by the Trust, the Sponsor executes an un-stake or withdrawal transaction, and such transaction is processed by the Ethereum Network. The
Staking Provider will not be able to change the address on the Ethereum Network to which staked Ether is to be withdrawn or to which Ether rewards shall be sent.

Under the Staking Arrangements, any staking rewards and/or transaction fees earned will be paid automatically on a periodic basis by the
Ethereum Network to one or more designated wallet addresses in the Trust’s custodial account, as specified by the Sponsor on behalf of the Trust. Periodically, the Trust will either (i) distribute Ether received as staking consideration to
the Trust’s beneficiaries (likely using a liquidating agent), (ii) sell that Ether for cash and distribute the proceeds to the Trust’s beneficiaries, (iii) retain the Ether in the Trust or (iv) a combination of the
foregoing. Subject to any slashing risk, the Trust (through the Custodian) will maintain control and remain the record and beneficial owner of the staked tokens at all times, and the tokens will remain associated with the Trust’s wallet.

The Staking Arrangements are expected to generally be on market terms, consistent with those typically offered by leading digital asset firms
that offer staking functionality. However, the Trust will negotiate certain provisions as necessary or helpful to preserve the Trust’s status as a grantor trust and the security of the Trust’s Ether, as well as to address governmental,
policy or regulatory concerns. For example, unlike certain digital asset firms that offer staking functionality through which a customer’s Ether is pooled with that of other customers (including, potentially, the Staking Provider in its general
staking offerings), the Staking Arrangements would not permit the Trust’s Ether to be pooled with that of other Ether holders, including the Staking Provider or the Staking Provider’s other customers, as described above. In addition, the
Staking Provider’s compensation is expected to be an agreed percentage of block rewards and transaction fees generated by the validating activities, unlike certain alternative staking arrangements under which a staking provider may be
compensated as an agreed percentage of Ether staked.

April 19, 2024

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 The Trust will have no right to direct the Staking Provider in the conduct of validation
activities, except to stake, un-stake and withdraw its staked Ether, and will not bear any expenses incurred by the Staking Provider in conducting those activities. In particular, the amount of any staking consideration that the Trust receives will
not be determined with reference to any expenses incurred by the Custodian or the Staking Provider. The Staking Arrangements will not include any obligation of the Trust to continue staking its Ether, or for the Custodian or the Staking Provider to
continue the Staking Arrangements, other than to the extent the Trust’s Ether cannot immediately be un-staked due to requirements of the Ethereum protocol. There may also be instances where the Staking Provider may pause or terminate its
staking activities due to its own independent assessment of the vulnerabilities of the Ethereum Network which would result in the Trust’s Ether not being staked for a period of time. The Sponsor anticipates that the Ethereum protocol and the
Staking Arrangements will permit withdrawal of staked Ether at regular intervals. The Sponsor believes that market practice for Provider-Facilitated Staking arrangements has largely become standardized, with little variation in terms, and therefore,
the Sponsor anticipates that the Staking Arrangements will generally align with the current practice of Staking Providers’ arrangements with other similarly situated third parties, subject to the negotiation of certain bespoke terms outlined
above. Accordingly, and because transitioning to a new Staking Provider would involve friction costs, the Sponsor does not expect the Trust to change Staking Providers frequently, if at all. In addition, while the Trust may enter into Staking
Arrangements with multiple Staking Providers, the Sponsor anticipates that any such arrangements would be substantively identical in all material respects to the Staking Arrangements described herein and in the Amended Preliminary Proxy Statement,
including, for the avoidance of doubt, the bespoke terms of the Staking Arrangements outlined above. Any material deviation from the Staking Arrangements as described herein would be disclosed in the Trust’s subsequent filings with the
Commission.

 The Staking Arrangements will not involve a disposition of the Trust’s Ether unless the Staking Provider commits a
slash-worthy offense. Slashing would only occur if the Staking Provider fails to act timely and accurately in validating new transactions or takes other proscribed actions, and the occurrence of such events is exceedingly rare. In light of the
mechanical and standardized nature of validation activities, the Sponsor does not anticipate that the Staking Provider, which is expected to be an institution of recognized and trusted standing in the digital asset marketplace, with whom the Sponsor
has had extensive prior interaction, will commit any slash-worthy offenses in the conduct of the Provider-Facilitated Staking activities. While the Trust generally bears the risk of slashing if the Staking Provider were to commit a slash-worthy
offense while the Trust’s Ether is staked, the Trust expects that the Staking Arrangements will include contractual commitments from the Staking Provider to the effect that, if any of the Trust’s Ether is slashed, the Staking Provider will
(i) provide prompt notice to the Sponsor and (ii) deliver replacement Ether to the Sponsor up to a cap (the “indemnity cap”). The Sponsor will have the right to direct the Staking Provider to cease staking the Trust’s Ether
at any time, subject to the extent the Trust’s Ether cannot immediately be un-staked due to technical considerations, and the Sponsor expects that notice of any slashing event will be timely and permit the Sponsor to halt the staking of the
Trust’s Ether before the indemnity cap is reached, thereby mitigating the risk of permanent loss of the Trust’s Ether without replacement.

Security and Controls

The Trust’s Custodian has multiple layers of security protocols designed to protect the Trust’s assets from unauthorized access or
transfer, which will remain in place when the Trust’s Ether is staked.

April 19, 2024

4

 The Trust’s Ether will be staked directly from the Trust’s wallets and will not be
transferred to any other wallet to be staked. The smart contract that governs staking on the Ethereum Network (a) mandates that the executor of the staking transaction (i.e., the Sponsor on behalf of the Trust) can execute the withdraw function
at any time through the Trust’s wallets administered by the Custodian and (b) limits the activities of the