Are Ethereum ETFs Live and Available for Trading

Ethereum ETFs have been a topic of interest for many investors. In September 2021, the first Ethereum ETF, the Purpose Ethereum ETF, was launched in Canada.

The Purpose Ethereum ETF is listed on the Toronto Stock Exchange (TSX) under the ticker ETHH. The ETF provides investors with exposure to Ethereum through a traditional brokerage account.

The ETF holds Ethereum through a trust, which is a common structure for cryptocurrency ETFs. This allows investors to buy and sell Ethereum without directly holding the cryptocurrency.

Ethereum ETFs are a type of exchange-traded fund that tracks the price of Ethereum, a decentralized platform for building blockchain-based applications.

They allow investors to gain exposure to Ethereum without directly buying or holding the cryptocurrency.

Ethereum ETFs are traded on traditional stock exchanges, just like stocks and bonds.

This makes them more accessible to a wider range of investors who may not be comfortable buying and holding cryptocurrencies directly.

Investors can buy and sell Ethereum ETFs throughout the trading day, just like stocks.

This provides liquidity and flexibility, making it easier to manage their investments.

Some Ethereum ETFs are actively managed, while others track a specific index or follow a passive investment strategy.

This can impact the fees associated with the fund, with actively managed funds typically having higher fees.

Investors should carefully review the fund's prospectus and fees before investing.

If you're looking for a spot ethereum ETF, you'll want to focus on the total cost of ETF ownership. Trading costs are a big factor, so look for the most liquid ETF with tight bid-ask spreads and substantial assets.

Grayscale's head start on assets may give it an edge initially, but iShares and Fidelity are likely to quickly take over as the top ethereum ETFs by assets and volume.

Even buy-and-hold investors should consider the fees, which are uniform across spot ethereum ETFs. The difference between a 15- and 25 basis-point fee is small, so choose an issuer with staying power.

Anything other than Grayscale Ethereum Trust is a good bet in terms of fees. If you're invested in crypto for its ethos, look for issuers that give back to the crypto community, such as Bitwise Ethereum ETF, VanEck Ethereum ETF, and Fidelity Ethereum Fund.

The Grayscale Ethereum Trust (ETHE) has an expense ratio of 2.50% and currently has no fee waiver promotions.

Ethereum ETFs have several advantages. They provide a convenient way to invest in Ethereum, eliminating the need to purchase and store the cryptocurrency directly.

One of the main benefits is that they are widely available, with several options listed on major exchanges. This allows investors to easily diversify their portfolios.

Investing in an Ethereum ETF can also reduce the risk associated with direct cryptocurrency ownership, as the fund's assets are typically held in a secure, regulated environment.

Spot ethereum ETFs have a significant advantage over current alternatives.

Fee waivers are a key part of this advantage, making them even more attractive to investors.

Grayscale's Ethereum Trust ETHE has a starting fee of 0.66% to as high as 2.50%, making spot ethereum ETFs a more cost-effective option.

Grayscale plans to keep its fee the same even after converting its private trust to an ETF, so spot ethereum ETFs' fee advantage only extends to the other seven ETFs.

Spot ethereum ETFs have a significant disadvantage when it comes to efficiency. They won't benefit from the in-kind creation and redemption process used by most ETFs.

This process allows traditional ETFs to avoid selling holdings and realizing capital gains, which can save them money on taxes. The SEC only approved cash creations and redemptions for spot ethereum ETFs, so they'll have to buy and sell ether to meet redemptions.

Trading costs can eat away at the edges of spot ethereum ETF performance. The extent of these costs remains to be seen, but it's a concern investors should be aware of.

The Ethereum ETF issuers engaged in a price war in the days leading up to the SEC's approval announcement in July 2024.

Many issuers filed multiple amended registration statements lowering their fees to try to undercut their competitors.

Some issuers responded by filing their own amended registration statements with even lower fees, just days later.

Others announced last-minute promos, such as reducing their fee to zero for the first six months of trading.

This fast-paced exchange of fee cuts and promos continued into the days just before the SEC's approval announcement.

It's worth double-checking any information you find online about Ethereum ETF fees and promos, as numbers could be outdated by the time you read them.

Investing in Ethereum ETFs may have some advantages over other ways of investing in Ethereum, but it's essential to consider the disadvantages compared to owning the cryptocurrency itself.

Ethereum ETFs can be a cheaper and more reliable way to invest in Ethereum for some investors, such as those who cannot buy Ethereum directly.

However, investors in the current crop of Ethereum ETFs will miss out on staking rewards, a feature that comes with owning the cryptocurrency itself.

Owning Ethereum directly allows investors to receive staking rewards, which is a sort of interest payment or dividend for Ether holders.

The Ethereum ETF market is still in its early stages, with no live products available as of now.

Ethereum's market capitalization has been steadily increasing, reaching a high of over $500 billion in 2021.

Investors are eagerly awaiting the launch of Ethereum ETFs, which could provide a more accessible and regulated way to invest in the cryptocurrency.

Ethereum's price action has been quite volatile recently, with a nearly 52% surge so far this year.

Ethereum's price has ticked lower to $3,480 by Tuesday afternoon.

The cryptocurrency initially eased late Monday following the approval news, which was expected.

Bitcoin, on the other hand, has been trading around $65,600 late Tuesday, sliding about 3.7% over the last 24 hours.

Bitcoin has spiked about 56% in 2024.

The difference between futures and spot Ethereum ETFs is quite significant. Futures ETFs are more speculative, implying that a trader is buying or selling into a fund that holds a contract at a specific price and is targeted at a particular date.

Ethereum futures ETFs have been existing since 2023, with issuers like Bitwise, VanEck, ProShares, Ark Invest/21Shares, and Valkyrie offering the product. Some of the issuers of the futures product include Bitwise (BITW), VanEck (EFUT), ProShares (EETH), Ark Invest/21Shares (ARKZ), and Valkyrie (BTF).

Unlike their futures counterparts, spot Ethereum ETFs have not started trading live.

Ethereum ETFs have been gaining traction, with eight different spot Ethereum ETFs now live and trading.

These ETFs offer a convenient way to invest in Ethereum without directly buying and storing the cryptocurrency.

The eight spot Ethereum ETFs are listed below, along with their fee structures and any promotional fee waivers.

Here are the details on each ETF:

These ETFs are listed on various exchanges, making it easy to buy and sell them.

The approval of Ethereum ETFs is a significant development, and it's worth understanding what it means for investors. Americans collectively hold nearly $40 trillion in retirement accounts, and many of those accounts do not allow trading of cryptocurrencies themselves.

Ethereum ETFs give investors a new way to invest in crypto, making it more accessible to those who couldn't previously trade cryptocurrencies in their retirement accounts. The approval of these ETFs is a major milestone for the Ethereum community.

The first spot Ethereum ETFs were approved in May by the US Securities and Exchange Commission, marking the first cryptocurrency to receive such approval since spot Bitcoin ETFs burst onto the scene this January. This approval paved the way for the first trading day of Ethereum ETFs.

The market's short-term reaction to the approval of Ethereum ETFs has been muted so far, with the price of Ether actually dropping slightly on July 23 between 9:30 a.m. and 4:00 p.m. Eastern time.