Ethereum ETFs: A Global Overview

There’s been a lot of excitement in the Ethereum community in the last two weeks as some of the largest global asset management firms have shown interest in spot Ethereum ETFs.

Last week, Fidelity joined BlackRock in filing an application with the US Securities and Exchange Commission (SEC) to list Ethereum ETFs while investors are waiting for the financial regulator to decide on applications for several crypto ETFs.

As the world's second-largest cryptocurrency by market capitalization, ETFs tracking ETH are expected to drive growth in the entire ecosystem by opening up new channels to invest in the digital asset. This could lead to a hike in ETH's price as more institutional and retail investors access the crypto market.

Before You Get Started

If you’d rather own ETH directly, you can buy and securely store the cryptocurrency using Trust Wallet, which gives you seamless access to 10M+ cryptocurrencies across 70+ blockchains. Remember, you must keep your crypto assets safe using a secure and non-custodial wallet to have complete control over your funds.

Trust Wallet can be downloaded as a mobile app, or you can install the Trust Wallet Extension for your desktop browser. For this guide, we'll focus on creating a new wallet using the Trust Wallet mobile app.

Step 1: Get the most updated version of Trust Wallet

Below you’ll see the steps to create a new wallet, but you could just as easily import an existing Web3 wallet to Trust Wallet, if that’s your preference.

To create a new wallet:

• Download, install and then open Trust Wallet

• Choose “Create a new wallet”.

• Choose your backup option, or you can optionally postpone the backup process by choosing “Skip”.

• Start using Trust Wallet.

Step 2: Buy crypto using your Trust Wallet

• Select the “Buy” button, from the wallet’s Home screen.

• Choose Ethereum (ETH), and enter the amount you wish to purchase.

• Select the third party provider & payment method you’d like to use.

• Select “Buy ETH”, and then follow the steps to complete the purchase.

Now that you understand how to buy ETH using Trust Wallet, keep reading to learn more about Ethereum ETFs and what impact they could have on Ethereum and the crypto market at large.

Demystifying Ethereum ETFs

A crypto exchange-traded fund (ETF) is an investment vehicle that tracks the performance of an underlying crypto asset and is traded publicly on a stock exchange. Rather than own and store the crypto asset directly, investors own shares of the ETF and gain indirect exposure to the ETH's price.

Ethereum ETFs make investing in Ethereum easier for non-tech savvy investors as they don’t have to buy, hold, and securely store ETH, alleviating many of the barriers to entry to crypto investing for both institutional and retail investors.

Ethereum futures ETFs are the only available exchange-traded products (ETPs) available to retail and institutional investors. The SEC has thus far rejected all applications by various asset management firms to trade crypto spot ETFs in the US.

Spot ETFs directly own the underlying crypto asset and offer its fractionalized shares to investors. Conversely, futures ETFs give exposure to futures contracts based on ETH, which are agreements to buy or sell the crypto asset in the future at a predetermined price.

The SEC approved the first six Ether ETFs in October 2023, paving the way for several other applications. Grayscale, the world's largest asset management firm, is in talks with the SEC to change its Ethereum Futures ETF into a spot ETF, a significant decision for the global crypto market. The decision is especially crucial as the entire crypto market awaits the SEC's decision on a spot Bitcoin ETF by January next year.

Ethereum ETFs offer several benefits to investors:

• Eliminate the need to manage the crypto asset while allowing them to participate in the crypto market.

• Accessible to traditional investors as they are traded on traditional stock exchanges.

• Traded on regulated exchanges, making them more attractive to institutional investors, who could help drive the asset's growth and global adoption.

Ethereum ETFs Across the Globe

Ether has generated interest among many investors as the world's second most popular cryptocurrency and the driving force behind decentralized finance (DeFi). Several securities exchanges across the globe now offer various Ethereum ETFs, which we discuss below.

Ethereum ETFs in North America

There are currently several Ethereum ETFs in Canada and the US. While the SEC only recently approved the trading of exchange-traded crypto investment products in its jurisdiction, Ethereum ETFs have been available in Canada since 2021. Here are some of the most popular available options in the region.

Purpose Ether ETF

Launched in April 2021, Purpose Ether ETF (ETHH) is one of Canada's first and largest crypto ETFs. The fund currently holds about $250 in assets under management. ETHH trades on the Toronto Stock Exchange (TSX) and uses cold storage for the assets. It has a 1% management fee.

CI Galaxy Ethereum ETF

Like ETHH, CI Galaxy Ethereum ETF (ETHX.B) started trading in April 2021. Galaxy Digital Capital Management, CI Financial's subsidiary, manages the fund, which currently holds $301 assets under management. ETHX.B's most significant advantage over other Ethereum ETFs in Canada is its low expense ratio, which is set at 0.4%

Valkyrie Ethereum ETF

Valkyrie Investments became the first US firm to offer investors exposure to ether's price, following SEC's approval in late September this year. Trading under the ticker symbol BTF, the fund combines BTC and ETH futures. TF holds assets worth about $56.3 million with a 0.95% management fee.

Developments in Ethereum ETFs in Europe

Unlike in the US, European investors have had access to various exchange-traded products for several years. Ethereum ETFs have been trading in Europe for two years after the first launch in 2021. Some of the region's largest exchanges offer futures and spot Ethereum ETPs.

Switzerland-based management firm 21Shares offers several options for exposure to the crypto market, including Ethereum ETFs. Investors can choose the 21Shares Ethereum Staking ETP or the 21Shares Ethereum Core ETF. The two funds are listed on the SIX Swiss Exchange.

Ethereum ETFs in Asia-Pacific: Growth and Potential

The Asia-Pacific region has long had a strong interest in the cryptocurrency market. There are currently several Ethereum ETFs, including spot ETFs trading on some of the largest stock exchanges in the region.

The Cboe Australia (CXA) and Australian Securities Exchange (ASX) offer several Ethereum ETFs to Australian investors keen on investing in the cryptocurrency market. The most popular options are the Global X 21Shares Ethereum ETF and 3iQ Coinshares Ether Feeder ETF.

The Stock Exchange of Hong Kong also offers several crypto ETFs, including the CSOP Ether Futures ETF, 3068.HK. Recently, Hong Kong also expressed interest in spot ETFs after the Securities and Futures Commission announced its consideration of spot ETFs.

As one of the largest digital hubs, Hong Kong's decision to allow these funds will significantly impact the global crypto market.

Ethereum ETFs in Other Regions: Emerging Trends

The increased global adoption of cryptocurrencies has fueled the interest in Ethereum ETFs. Although other regions are yet to catch up with the others above, several asset firms have launched Ethereum ETFs.

A leading example is Brazil, which first approved Ethereum ETFs in 2021. Several crypto ETPs are currently listed on the country's stock exchange, B3.

Conclusion Ethereum ETFs are an excellent option for investors wanting exposure to ETH without directly owning and having to securely store the underlying crypto asset.

Ethereum holds the second-largest market capitalization in the cryptocurrency market. Therefore, the increased interest in Ethereum ETFs could significantly increase the global adoption of digital assets.

Although Ethereum ETFs make it easier to invest in Ethereum, they are just as volatile as the cryptocurrency itself. As such, it's crucial to research and understand the global crypto market and its price drivers before investing in any crypto ETF.

To securely buy and store ETH directly, download Trust Wallet today.

Frequently Asked Questions

What are Ethereum ETFs?

Ethereum ETFs are exchange-traded funds that track the performance of Ethereum, allowing investors to gain exposure to ETH without directly owning the cryptocurrency.

Can I buy ETH directly instead of investing in ETFs?

Yes, you can buy and store ETH directly using crypto wallets like Trust Wallet, which offers access to Ethereum and other cryptocurrencies.

How do Ethereum ETFs differ from owning ETH directly?

While owning ETH involves buying and storing the cryptocurrency, Ethereum ETFs let investors indirectly invest in ETH through shares of the ETF, traded on stock exchanges.

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Note: Any cited numbers, figures, or illustrations are reported at the time of writing, and are subject to change.