5 Best New Ethereum ETFs With the Highest Upside for You
Following the Securities and Exchange Commission’s approval of Spot Ethereum exchange-traded funds (ETFs) in May, these began trading on July 23. This comes on the heels of spot Bitcoin ETFs being approved in January — something that many have deemed a landmark decision for the crypto industry.
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Matt Wright, CEO of GaiaNet, argued that the launch of ETH ETFs marks a significant milestone in the integration of Ethereum into traditional finance.
“While it’s too early to predict which ETFs will ultimately prevail, the immediate impact is clear: a substantial influx of capital into Ethereum,” said Wright. “This competition among ETFs is likely to drive fees lower, benefiting investors.”
Yet, he also added that success will not be solely determined by fee structures, as effective marketing and investor education will play critical roles.
The SEC approved eight ETFs as well as approved the conversion of an existing trust- all of which invest directly in the digital asset. These are: the Grayscale Ethereum Mini Trust (ETH), Franklin Ethereum ETF (EZET), VanEck Ethereum ETF (ETHV), Bitwise Ethereum ETF (ETHW), 21Shares Core Ethereum ETF (CETH), Fidelity Ethereum Fund (FETH), BlackRock’s (BLK) iShares Ethereum Trust (ETHA) and the Invesco Galaxy Ethereum ETF (QETH). In addition, it approved Grayscale Ethereum Trust (ETHE) conversion to a spot ETF.
Here’s a look at some of these ETFs, which have different features, fee structures and bring distinct advantages to the table.
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Fidelity Ethereum Fund
Fees: Waived through December 31, 2024. At the start of next year, the fee will be 0.25% (25 bps), according to the prospectus.
Share price as of July 26: $32.79.
One of the benefits of this fund is that the firm has been working since 2014 to develop a digital assets ecosystem.
“We drew on over a decade of experience in digital assets to deliver a spot ether exchange-traded product that enables investors to gain exposure to ether through thoughtful index and product design supported by dedicated trading and operations teams and industry-leading security,” said Cynthia Lo Bessette, Fidelity head of digital asset management, in an emailed statement.
Jeff Sekinger, CEO and founder of Nurp, also noted that one of the upsides is the fund’s established expertise, and that what distinguishes it is the reputation and experience of its management team.
“With inflows of $137.9 million, investors are clearly drawn to Fidelity’s established track record in the ETF space. It also posted net inflows on its second trading day, showing continued investor interest,” he added.
Grayscale Ethereum Trust
Fees: 2.5%.
Share price as of July 26: $27.7.
A Grayscale spokesperson said that this 2017-launched fund has a long operating history as the first publicly-traded Ethereum fund in the U.S.
“Since its inception, ETHE has steadily grown to become the largest, most liquid Ethereum fund, and began trading on NYSE Arca as a spot Ethereum ETP on July 23 with an established and diverse investor base across retail and institutional investors alike,” according to the spokesperson. “The size and scale of ETHE make it an efficient trading tool for risk allocation.”
Grayscale Ethereum Mini Trust
Fees: 0% for six months. Then, 0.15% after the fund reaches $2 billion in assets or after the 6-month waiver period, according to the prospectus.
Share price as of July 26: $3.06.
According to a Grayscale spokesperson, the low share price and fee “lowers the barrier to accessing Ethereum, [in turn] enabling investors to gain exposure to Ethereum with a smaller initial capital investment.”
Nurp’s Sekinger argued that the fund’s fee efficiency could be appealing to cost-conscious investors. “This allows investors to keep more of their returns. The trust has seen inflows of $65.5 million, highlighting investor interest in its cost-effective approach.”
iShares Ethereum Trust
Fees: Partially waived for the first 12 months, “so that the fee will be 0.12% of the net asset value of the Trust for the first $2.5 billion of the Trust’s assets. If the fund exceeds $2.5 billion of the Trust’s assets prior to the end of the 12-month period, the Sponsor’s Fee charged on assets over $2.5 billion will be 0.25%,” per the prospectus.
Share price as of July 26: $24.78.
According to Vijay Marolia, founder and chief investment officer of Regal Point Capital Solutions, with ETFs, “it’s not just the fees that one should pay attention to — size also matters and, in some cases, it matters more.”
He added that, “this is because liquidity is what you want and sometimes, it’s worth paying extra to have more liquidity. This ETF is one of the largest if not the largest and it still has a low fee of 0.25% which is discounted for the first 12 months at 0.12%.”
Bitwise Ethereum ETF
Fees: Waived for the first six months or when the fund reaches $500 million in assets. 0.20% after that.
Share price as of July 26: $22.42.
The Bitwise Ethereum ETF differentiates itself by donating 10% of its profits to Ethereum developers, according to its prospectus.
“This demonstrates a commitment to supporting the Ethereum ecosystem. It debuted with an impressive $1 billion in volume,” said Sekinger.
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In addition, he noted that it became the first U.S. exchange-traded product to publish on-chain addresses, showcasing transparency.”
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