5 Best Ethereum ETFs to Buy in 2024

Since ethereum crossed the $4,000 mark in early March for the first time since December 2021, there is cause for excitement.

The second-largest cryptocurrency by market capitalization is available for investment through Ethereum ETFs in your brokerage account if you’d like exposure to it.

Our team analyzed the available products in this new market to determine which ethereum ETFs would be the best in 2024. We took into account elements that are important for both long-term and short-term investing, such as bid-ask spread, tax efficiency, assets under management, and expense ratios. Better liquidity and lower trading costs are indicated by a smaller bid-ask spread, which is advantageous to you.

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5 Best Ethereum ETFs

We examined exchange-traded funds that offer exposure to Ethereum via futures. Derivatives called futures place a wager on Ethereum’s future price as opposed to its present spot price.

Applications to permit the CBOE, Nasdaq, and NYSE to list ether ETFs were authorized by the SEC on May 23, 2024. The following fund houses’ proposals are impacted by the decision: VanEck, Fidelity, Grayscale, BlackRock, Invesco, and Ark 21 Shares.

Having said that, issuer approval is still required before spot Ethereum funds may be introduced. Spot bitcoin ETFs were approved by the SEC earlier this year, opening the door for the introduction of ETFs of a similar kind.

1.VanEck Ethereum Strategy ETF (EFUT)

With a more appropriate amount under total assets and a lower expense ratio than the ProShares Ether Strategy ETF, the VanEck Ethereum Strategy ETF is a good choice. An additional asset class that this ETF oversees consists of CME ethereum futures that are backed by Treasury bills.

Just a heads up, you might have to pay taxes on any future distributions from this ETF if you have it in a taxable brokerage account.

Pros

• An alternative to ProShares Ether Strategy ETF that is worthy of consideration.
• Very low ratio of expenses to revenues.
• Offers exposure to Ethereum futures directly.

Cons

• A larger tax liability may result from relatively large yearly distributions.
• Liquidity is lower compared to the ProShares Ether Strategy ETF.
• Prices of stocks can fluctuate wildly.

2. ProShares Ether Strategy ETF (EETH)

In October 2023, the ProShares Ether Strategy ETF became the first U.S.-based ethereum ETF to come online. You may speculate on the price of ethereum without actually owning any of the cryptocurrency thanks to this fund’s tracking of a portfolio of CME ethereum futures. The fact that retail investors have flocked to the ProShares Ether Strategy ETF—the biggest U.S.-listed ethereum ETF in terms of assets under management—is a testament to the fact that it was the first of its kind.

Pros

• Ethereum futures exposure provided by first U.S.-listed exchange-traded fund.
• Using most brokerage accounts to buy and sell is easy.
• This handpicked list’s highest AUM.

Cons

• An expense ratio that is somewhat high.
• Be warned, it’s not always stable.
• Subsequently this year, the spending ratio waiver will expire.

3. ProShares Bitcoin and Ether Equal Weight Strategy ETF (BETE)

The ProShares Bitcoin and Ether Equal Weight Strategy ETF might be a better choice than the ProShares Bitcoin and Ether Market size Weight Strategy ETF if you’re an ethereum bull and want to gamble more on the cryptocurrency than its market size suggests. The exposure of this exchange-traded fund will be derived from CME bitcoin and ethereum futures that are collateralized by Treasury bills.

Although it shares certain similarities with Bitwise’s Bitcoin and Ether Equal Weight Strategy ETF, ProShares’ AUM is lower, and the former does not originate from a specialized digital assets organization.

Pros

• Offers a higher exposure to Ethereum in relation to its market capitalization.
• Professionally rebalanced your portfolio on a regular basis.
• Could be of use in spreading your bitcoin and Ethereum holdings.

Cons

• Significantly elevated net expense ratio.
• In late 2024, the expense ratio waiver will come to an end.
• Parity with pure-play ethereum futures ETFs in terms of AUM is lower.

4. ProShares Bitcoin and Ether Market Cap Weight Strategy ETF (BETH)

Both the Bitwise Bitcoin and Ether Equal Weight Strategy ETF and the ProShares Bitcoin and Ether Market Cap Weight Strategy ETF offer exposure to bitcoin and ethereum futures, but the former divides its holdings evenly between the two, while the latter uses market capitalization to its advantage. This exchange-traded fund (ETF) adapts in tandem with the fluctuating market valuations of different cryptocurrencies. A good exchange-traded fund (ETF) to passively follow if you’re interested in both bitcoin and ethereum is the ProShares Bitcoin and Ether Market Cap Weight Strategy ETF.

Pros

• Simple to buy and sell just like any other stock.
• Invests in two major cryptocurrency futures based on market capitalization.
• Could be useful for investors looking to reduce their exposure to cryptocurrencies.

Cons

• Significantly elevated net expense ratio.
• Subsequently this year, the spending ratio waiver will expire.
• The AUM is not very large.

5. Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP)

This exchange-traded fund (ETF) from Bitwise does not offer exposure to pure-play Ethereum futures, unlike its predecessors. On the contrary, it splits its assets evenly between CME futures on bitcoin and CME futures on ether. Treasury bills serve as collateral for both. This exchange-traded fund (ETF) gives you a piece of the crypto market in one ticker by letting you profit from the rise of the top two cryptocurrencies, weighted equally.

Pros

• Ratio of net expenses reduced.
• Makes bitcoin futures available to investors.
• Under the supervision of an industry-leading digital assets firm.

Cons

• The AUM is not very large.
• provides no exposure to Ethereum futures as a pure play.
• There is a little less trading volume in this Ethereum ETF compared to others.

How to Buy Ethereum ETFs

Acquiring ethereum ETFs has a similar uncomplicated procedure to buying a standard stock or ETF:

Search the ETF. Initiate your search for the ethereum ETF using its ticker symbol on your brokerage platform.

Specify the order type. Determine whether you intend to execute a market order (to purchase at the prevailing market price) or a limit order (to purchase at a specified price or a more favorable price).

Determine the price. If you are utilizing a limit order, please provide the specific price at which you are willing to purchase the ETF.

Specify the quantity. Specify the quantity of shares you intend to acquire.

Fulfill the purchase order. Please carefully examine the contents of your purchase to ensure accuracy, and then proceed to submit your buy order to finalize the transaction.

Should I Invest in Ethereum ETFs?

Those who want to invest in ethereum but don’t want to deal with the hassle of self-custody or understanding how to use a cryptocurrency exchange may find Ethereum ETFs to be a good fit. An easy and accessible way to indirectly invest in ethereum is through these exchange-traded funds (ETFs), which may be kept in ordinary brokerage accounts and traded like any other asset.

Nevertheless, drawbacks do exist. Because these ETFs are only available during market hours, there is a chance that they may be out of sync with the spot price of ethereum, which is a problem because futures contracts are used and ethereum trades all the time.

Ethereum and the cryptocurrency market as a whole are known for their volatility, so investors should be ready for that. Investment costs are higher than with more conventional exchange-traded funds (ETFs), so you’ll need to figure out whether the costs are worth it.

A Guide to Invest in Ethereum ETFs

Before putting money into Ethereum exchange-traded funds (ETFs), you should determine your risk tolerance and long-term goals. Think about the following questions:

Can I afford to have tracking mistakes? Ethereum exchange-traded funds (ETFs) might not always reflect the cryptocurrency’s current price. Possible causes of this disparity, called tracking error, include expenditure ratios, futures contracts, and the fact that cryptocurrency and traditional markets trade at separate times.

Where should I keep my Ethereum? Ethereum exchange-traded funds (ETFs) are a great option if you want to take advantage of a brokerage account’s regulatory structure and ease of use. On the other hand, going straight to spot ethereum can be the way to go if you’re cool with utilizing a cryptocurrency exchange, like self-custody, or want to stake your coins.

Do I feel safe taking this chance? Keep in mind that ethereum spot and ethereum ETFs are extremely volatile, possibly even more so than regular stocks.

What is the best ETF? Consider the expense ratio, bid-ask spread, and AUM when comparing Ethereum ETFs if you decide to invest in them. If you follow these steps, you should be able to choose an ETF that fits your investing strategy and is both cheap and liquid.

Conclusion

The ProShares Ether Strategy ETF is the greatest exchange-traded fund (ETF) for ethereum in our opinion. Its liquidity and the ease of entering and exiting positions are further highlighted by its moderate 0.12% bid-ask spread. Beyond that, it was an early player in the space as the first ethereum futures exchange-traded fund (ETF) listed in the United States.

Although the expense ratio of the ProShares Ether Strategy ETF is 0.95%, the overall cost of ownership is increased due to the bid-ask spread of 0.33% in the VanEck Ethereum Strategy ETF, especially if you intend to purchase and sell.

For those seeking exposure to Ethereum through their brokerage accounts, the ProShares Ether Strategy ETF provides a more cost-effective and liquid choice, even though the fee ratio is slightly higher.

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BTCC Guide:

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