The launch of spot Ethereum ETFs in the United States marks a pivotal moment for both the crypto industry and traditional finance. Approved for trading on major exchanges like CBOE, Nasdaq, and NYSE Arca, these ETFs offer a regulated and accessible pathway for investors to gain exposure to Ethereum’s native asset, ETH, without the complexities of direct cryptocurrency ownership.
This guide covers everything you need to know—from how these ETFs work and where you can buy them, to how to compare your options and what to expect in the near future.
What Are Ethereum ETFs?
Ethereum ETFs are exchange-traded funds that hold ether (ETH) as their primary asset. Unlike futures-based ETFs, which derive value from ether futures contracts, spot ETFs hold actual ether tokens. This structure means the ETF’s share price closely tracks the live market price of ETH.
These funds are managed by established financial institutions, which are responsible for custody, regulatory compliance, and daily operations. Shares of these ETFs are traded on traditional stock exchanges, making them available to anyone with a standard brokerage account.
When Will Ethereum ETFs Begin Trading?
Trading is set to begin on July 23, 2024, on the Cboe BZX Exchange for the following five ETFs:
- 21Shares Core Ethereum ETF
- Fidelity Ethereum Fund
- Invesco Galaxy Ethereum ETF
- VanEck Ethereum ETF
- Franklin Ethereum ETF
The remaining four ETFs are expected to launch on the same day on Nasdaq or NYSE Arca, though these exchanges have not yet made an official announcement.
Where Can You Buy Ethereum ETF Shares?
Once these ETFs are listed on national exchanges, they will be available through most major online brokerages. Well-known platforms such as Fidelity, E*TRADE, Robinhood, Charles Schwab, and TD Ameritrade will support trading of these products.
You do not need a crypto wallet or exchange account to invest. Simply use your existing brokerage account to buy and sell shares just as you would with stocks or other ETFs.
Comparing the Ethereum ETF Options
There are nine spot Ethereum ETFs expected to begin trading. While they are structurally similar—each holding ETH via qualified custodians and offering standard investor protections—they differ primarily in their fee structures.
Most of the funds have annual management fees between 0.15% and 0.25%. Several are offering temporary fee waivers to attract early investors.
Here’s a summary of the key options:
- Grayscale Ethereum Mini Trust (ETH)
Management fee: 0.15%
Full fee waiver for the first six months or until the fund reaches $2 billion in assets. - Franklin Ethereum ETF (EZET)
Management fee: 0.19%
Full fee waiver until January 2025 or until the fund reaches $10 billion in assets. - Grayscale Ethereum Trust (ETHE)
This is a conversion of an existing trust. Its fee remains high at 2.5% with no waiver.
Other notable issuers include BlackRock, Bitwise, and Invesco, each with competitive fees and temporary promotions.
When choosing a fund, consider not only the expense ratio but also the size of the fund, the reputation of the issuer, and liquidity. For most retail investors, opting for a low-cost fund with a temporary fee waiver can be a smart way to start.
Will Ethereum ETFs Offer Staking?
As of launch day, none of the Ethereum ETFs will include staking.
Staking allows ETH holders to earn rewards by participating in network validation, but it also introduces complexity and liquidity challenges for ETF issuers. The SEC has so not approved staking within these ETFs due to concerns over redemption timing and asset liquidity.
That said, several issuers have expressed interest in adding staking in the future. Proposals involve maintaining a liquidity buffer to facilitate redemptions while a portion of assets are staked. If approved, this feature could be added in the coming months, potentially boosting returns for investors.
For now, however, staking is not available through these products.
How to Evaluate Which Ethereum ETF Is Right for You
Your investment decision should be based on:
- Fees: Compare management fees and how long waivers apply.
- Liquidity: Larger funds may offer tighter bid-ask spreads.
- Issuer Reputation: Consider the track record of the asset manager.
- Future Potential: Some funds may later introduce features like staking.
Diversification across multiple ETFs usually isn’t necessary since they all track the same asset. Instead, focus on minimizing costs and choosing a trustworthy provider.
👉 Compare real-time Ethereum ETF metrics and fees
Frequently Asked Questions
What is an Ethereum ETF?
An Ethereum ETF is an exchange-traded fund that holds ether (ETH). It allows investors to gain exposure to ETH’s price movements without buying or storing the cryptocurrency directly.
How do I buy an Ethereum ETF?
You can purchase shares through any major brokerage platform using a standard investment account. Search for the ETF’s ticker symbol once trading begins on July 23.
Can I stake my ETH in an ETF?
Not currently. The initial batch of ETFs does not support staking, though issuers are exploring adding this feature in the future.
Are Ethereum ETFs safe?
These ETFs are regulated by the SEC and offer investor protections, including insurance against custodian failure. However, like all investments, they carry market risk based on ETH’s price volatility.
What is the difference between a spot ETF and a futures ETF?
A spot ETF holds actual ether, while a futures ETF holds contracts tied to ETH’s future price. Spot ETFs typically track the current price of ETH more closely.
Do Ethereum ETFs pay dividends?
Not in the traditional sense. If staking is added in the future, income from staking rewards may be distributed to shareholders.
Conclusion
The introduction of spot Ethereum ETFs is a landmark event that bridges crypto and conventional markets. For investors, it offers a familiar, secure, and cost-efficient method to invest in Ethereum.
As you consider your options, prioritize low fees, a reputable issuer, and an understanding of the product’s features and limitations. Keep an eye on future developments—such as the potential addition of staking—that could further enhance the value of these investment vehicles.
Whether you're new to digital assets or an experienced trader, Ethereum ETFs represent a significant step forward in the accessibility and maturity of cryptocurrency investing.