If you are planning to buy Ethereum and HODL for years to come in a tax-deferred account, ensure that the expense ratio remains permanently low. The best Ethereum ETFs don’t just offer low temporary teaser rates—they provide a permanently low expense ratio to ensure you compound your money over time.
Our Pick
For most people, the one to buy
✓ Lowest Fee (0.19%)
✓ Trusted Custodian (Coinbase)
Runner-up
For those who value security above all else
✓ Low Fee (0.25%)
✓ Proprietary Custodian
New Developments in Ethereum ETFs
About six months have passed since the Securities and Exchange Commission (SEC) approved the first spot Bitcoin ETFs. Now, there’s reason to believe the SEC is days away from approving the first spot Ethereum ETFs.
On July 15, Reuters, citing crypto industry sources involved in discussions with the SEC, reported that the agency will allow Ethereum ETFs to begin trading Tuesday, July 23.
What is a Spot Ethereum ETF?
A spot Ethereum ETF is an exchange-traded fund that invests directly in Ethereum, the world’s second-largest cryptocurrency by market capitalization after Bitcoin.
Ethereum has many features that distinguish it from Bitcoin. Its blockchain doesn’t just host Ether coins; it’s also home to decentralized apps and non-fungible tokens that run on the Ethereum protocol. Ethereum also now uses a proof-of-stake system to create new coins—a more energy-efficient system than the proof-of-work process behind Bitcoin mining. (Ethereum also used a proof-of-work system until it switched to proof-of-stake in 2022.)
There are already Ethereum strategy ETFs on the market, which indirectly track the price of Ether using futures contracts. However, these may not track the cryptocurrency’s price quite as accurately as a spot Ethereum ETF would, and they may charge higher fees. If spot Ethereum ETFs are approved in July, they’d be the first of their kind.
How Many Ethereum ETFs are approved?
To date, eight different ETF issuers have filed registration statements with the SEC for Ethereum ETFs.
| S1 | Ticker | Fee | Fee Waived Until | Fee Waived until AUM of | Custodian | |
|---|---|---|---|---|---|---|
FRANKLIN ETHEREUM ETF | https://www.sec.gov/Archives/edgar/data/2011535/000113743924001166/fets1a07172024.htm | EZET | 0.19% | until 1/25 | $10 Billion | Coinbase |
| Grayscale Ethereum Mini Trust | https://www.sec.gov/Archives/edgar/data/2020455/000119312524181081/d756153ds1a.htm | ETH | 0.15% | 6 months | $2 Billion | Coinbase |
| VanEck Ethereum ETF | https://www.sec.gov/Archives/edgar/data/1860788/000093041324002024/c109048_s1a.htm | ETHV | 0.20% | 1 Year | $1.5 Billion | Gemini |
| Bitwise Ethereum ETF | https://www.sec.gov/Archives/edgar/data/2013744/000199937124008735/bitwise-s1a_071124.htm | ETHW | 0.20% | 6 months | $0.5 Billion | Coinbase |
| 21Shares Core Ethereum ETF | https://www.sec.gov/Archives/edgar/data/1992508/000121390024061973/ea0205580-08.htm | CETH | 0.21% | 6 Months | $0.5 Billion | Coinbase |
| Fidelity Ethereum Fund | https://www.sec.gov/Archives/edgar/data/2000046/000119312524180466/d759655ds1a.htm | FETH | 0.25% | Until 12/24 | Unlimited | Fidelity Digital Asset |
| iShares Ethereum Trust | https://www.sec.gov/Archives/edgar/data/2000638/000143774924022935/iset20240710_s1a.htm | ETHA | 0.25% | 12 Months | $2.5 Billion | Coinbase |
| Invesco Galaxy Ethereum ETH | QETH | 0.25% | Coinbase | |||
| Grayscale Ethereum Trust | ETHE | 2.50% | Coinbase |
They are listed below, along with the expected name and ticker symbol of each ETF, each ETF’s fee and any promotional fee waivers.
Source: SEC EDGAR system. Data is current as of July 22, 2024, and for informational purposes only.
In the days leading up to the first Bitcoin ETF approvals in January 2024, Bitcoin ETF issuers engaged in a race to the bottom in terms of fees. Many issuers filed multiple amended registration statements lowering their fees to try to undercut their competitors, some of whom responded hours later by filing their own amended registration statements with even lower fees.
Others announced last-minute promos—such as reducing their fee to zero for the first six months of trading—in an effort to distinguish themselves as the cheapest Bitcoin ETF. This fast-paced exchange of fee cuts and promos continued into the hours just before the SEC’s approval announcement.
Investors may witness a similar rapid-fire price war between prospective Ethereum ETF issuers in the days ahead. With that in mind, it’s worth double-checking any information you find online about Ethereum ETF fees and promos. Any numbers you see online could be outdated by the time you read them.
Ethereum Strategy ETFs
We define an Ethereum strategy ETF as any ETF that invests at least 50% of its assets in Ethereum futures. There are seven such funds on the market today, and they’re listed below from lowest to highest fee.
| Fund Name & Symbol | Fee | Notes |
|---|---|---|
| VanEck Ethereum Strategy ETF (EFUT) | 0.66% | Invested in Ether futures. |
| ARK 21Shares Active Ethereum Futures Strategy ETF (ARKZ) | 0.70% | Invested in Ether futures. |
| Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP) | 0.90% | Invested in Bitcoin and Ether futures. Fee reduced to 0.85% until Oct. 2, 2025. |
| Bitwise Ethereum Strategy ETF (AETH) | 0.92% | Invested in Ether futures. Fee reduced to 0.85% until October 2, 2025. |
| Valkyrie Bitcoin and Ether Strategy ETF (BTF) | 1.24% | Invested in Bitcoin and Ether futures. |
| ProShares Ether Strategy ETF (EETH) | 1.33% | Invested in Ether futures. Fee reduced to 0.95% until Oct. 31, 2024. |
| ProShares Bitcoin & Ether Equal Weight Strategy ETF (BETE) | 1.33% | Invested in Bitcoin and Ether futures. Fee reduced to 0.95% until Oct. 31, 2024. |
Sources: Fund websites. Data is current as of July 17, 2024, and for informational purposes only.
What Would ETF Approvals Mean for Ethereum?
The price of Ethereum is up about 50% this year at the time of writing. Would ETF approvals add to that momentum? That remains to be seen.
Ethereum ETFs would give 401(k) and IRA investors a new way to invest in crypto. Americans collectively hold nearly $40 trillion in retirement accounts, and many of those retirement accounts do not allow trading of cryptocurrencies themselves.
In the three months after Bitcoin ETFs were approved, the price of Bitcoin did rise—by more than 50%, in fact. But it’s hard to say whether this was entirely due to ETF-related buying.
There’s another potential explanation for Bitcoin’s rally in early 2024: the hype leading up to the Bitcoin halving in April. And whatever the biggest cause of that rally was, it didn’t last long. Bitcoin is up less than 5% over the last three months.
Ethereum ETFs vs. Ethereum Itself
Spot Ethereum ETFs could have some advantages over other ways of investing in Ethereum. As we’ve discussed, they could offer investors who cannot buy Ethereum directly (such as retirement account investors) a cheaper and more reliable way to invest in Ethereum than the existing slate of Ethereum strategy ETFs.
However, it’s important to note that Ethereum ETFs do have some disadvantages compared to owning the cryptocurrency itself. Ethereum ETF investors would not receive staking rewards (a sort of interest payment or dividend for Ether holders).
If you want that feature of Ethereum, you’ll need to invest in the cryptocurrency itself.
Grayscale Spinout: New Ethereum Mini Trust
TAMFORD, Conn., July 17, 2024—Grayscale Investments®, the world’s largest crypto asset manager*, offering more than 20 crypto investment products, previously announced that it has set a record date of July 18, 2024 (the “Record Date”) for the initial creation and distribution of shares of Grayscale Ethereum Mini Trust (the “ETH Trust”) to shareholders of Grayscale Ethereum Trust (Ticker: ETHE) (“ETHE”) (referred to as the “Initial Distribution”). Grayscale intends to list the ETH Trust on NYSE Arca, subject to required regulatory approvals, under the ticker symbol “ETH.”
Today Grayscale is confirming that from and after July 18, 2024, anyone who purchases ETHE shares will not be entitled to receive ETH shares in the Initial Distribution.
Additionally, Grayscale currently expects the Distribution Date to be July 23, 2024, following (i) the filing and effectiveness of the ETH Trust’s registration statement on Form 8-A to register the ETH Shares under the Exchange Act, (ii) the effectiveness of the ETH Trust’s registration statement on Form S-1 (Registration No. 333-278878) under the Securities Act, and (iii) the ETH Shares having been approved for listing on NYSE Arca. No assurance can be given that the Initial Distribution will occur on Grayscale’s anticipated timeline, and Grayscale will update the market to the extent its expectations change.
| Record Date | July 18, 2024 |
|---|---|
| Ratio of ETHE Shares: ETH Shares | 1:1 |
| % of Ether held by ETHE contributed to the ETH Trust | 10% |
| Anticipated Distribution Date | July 23, 2024 |
*By AUM as of 7/15/2024
Why Grayscale is Spinning Out the Ethereum Mini Trust:
Grayscale is likely spinning out 10% of its Ethereum holdings into the new Ethereum Mini Trust due to its previous high fee structure (2.5%) for the Grayscale Bitcoin Trust (GBTC), which led to significant outflows to other
products. By spinning off 10%, they will still collect massive fees from 90% of investors who do not switch fully, while potentially attracting new investors with the lower-fee Mini Trust.