Ethereum ETFs: DeFi and NFTs tap dance to Wall Street
The second-largest cryptocurrency made its way to nine ETH exchange-traded funds, or ETFs, in July 2024 when they got the greenlight by the Securities and Exchange Commission. This decision comes seven months after spot Bitcoin ETFs rolled out.
Packaging a bunch of ETFs with genuine ETHUSD is another big step for crypto’s journey to the financial mainstream. Some of the big shot issuers expected to lead the push include Fidelity, Franklin Templeton, Invesco, 21Shares, and VanEck.
Symbol summaries
Grayscale Ethereum Mini Trust (ETH) is an ETF invested in Ether. Sponsored by Grayscale Investments, ETH is a mini version of its full-sized ETHE fund; it features a value per share of 1/10th of the original fund, which results in lower overall fees. ETH aims to reflect the value of Ether held by the fund, less expenses and liabilities.
Franklin Ethereum ETF (EZET) was launched on July 23, 2024. Sponsored by Franklin Resources, Inc., this fund aims to reflect Ether's price performance, minus operational expenses. EZET tracks Ethereum using the CME CF Ether-Dollar Reference Rate, New York Variant, aggregating data from selected exchanges. EZET prioritizes asset protection primarily through offline cold storage, reducing cyber theft risk.
VanEck Ethereum ETF (ETHV) was launched on June 25, 2024. It provides exposure to ETH, mirroring its price performance minus operational expenses, and backs its shares by Ether held in cold storage with a qualified custodian. The fund's daily valuation is based on the MarketVector™ Ethereum Benchmark Rate, derived from the price on the top five ETH trading platforms. ETHV issues and redeems shares in blocks of 25,000.
Bitwise Ethereum ETF (ETHW) was launched on July 22, 2024. It is an Ethereum fund that offers investors low-cost exposure to Ether's price, less the costs, complexities, and custody issues of direct ownership. ETHW holdings are valued daily based on the CME CF Ether Reference Rate — New York Variant, calculated by CF Benchmarks Ltd. Additionally, 10% of ETHW profits are donated to Protocol Guild and PBS Foundation to support Ethereum open-source development.
21Shares Ethereum Core ETP (CETH) is an ETF tracking Ethereum's performance. It is the second product of the 21Shares Crypto Winter Suite, a project aimed at offering investors more ways to enter the crypto ecosystem. Designed for long-term holders, CETH is 100% physically backed by ETH, stored in cold storage by an institutional-grade custodian, providing greater protection.
Fidelity Ethereum Fund (FETH) was launched on July 23, 2024. It's an Ethereum ETF tracking ETH performance based on the Fidelity Ethereum Reference Rate, which is adjusted for expenses and liabilities. FETH stands out with its self-stored approach: it invests in Ether and securely stores it via Fidelity’s in-house services. FETH shares are accessible through brokerage, trust, and tax-advantaged accounts like IRAs. They're valued daily and trade in blocks of 25,000.
The iShares Ethereum Trust ETF (ETHA) aims to mirror Ethereum's price performance and offers access through a traditional brokerage account. Its convenience resides in the removal of all the operational burdens, high trading costs, and tax reporting complexities associated with directly holding ETH. The fund was launched on June 24, 2024, by BlackRock, the world’s major asset manager.
The Invesco Galaxy Ethereum ETF (QETH) is an ETP launched on July 23, 2024. QETH as a collaboration between Galaxy Asset Management and Invesco Ltd. The fund invests directly in physical Ethereum, providing investors exposure to Ethereum's market performance via the Lukka Prime Ethereum Reference Rate. The fund simplifies acquiring, holding, and trading ETH and is backed by Ether in cold storage for enhanced security. Holdings are valued daily based on fair market value.
Grayscale Ethereum Trust launched its ETF (ETHE) on July 23, 2024. This fund tracks Ethereum price and helps investors gain exposure to ETF without taking risks associated with direct purchase, storage, or safekeeping. ETHE is traded on NYSE ARCA and is sponsored by Grayscale, a major crypto asset management company.