What if you could trade in Ethereum without buying any crypto? You can, thanks to Ethereum ETFs.
We’ll show you how they work.
Ethereum ETFs Unveiled
Cryptocurrency is the money of the future – and the present, whether you’re using it to make purchases or play at crypto betting sites. People seem more interested right now in investing, hoping their coins will keep increasing in value as we switch our money from analog to digital.
Not that there’s anything wrong with a little speculation. However, the price of cryptocurrency is indeed volatile, and not every crypto exchange has its ducks in a row when it comes to security.
What if you could avoid all that and just buy shares in your favorite coins?
You can – sort of. Thanks to exchange-traded funds, or ETFs for short, you can profit from the Bitcoin market without actually having to purchase Bitcoin. The SEC approved the first 11 “spot” Bitcoin ETFs in the United States back in early January, and they’ve been doing brisk business ever since.
Now the focus is on Ethereum.
The first Ethereum ETFs in Europe and Canada were launched in 2021, and the SEC approved them for the U.S. way back in October 2023 – but they haven’t approved spot ETFs yet. They’re about to, though; here’s what you need to know for when they do.
What Is A Spot ETF?
There are two main types of crypto ETFs out there: futures, and spot.
The former is a derivative-based ETF where the underlying asset is a futures contract; with the latter, the asset is actual crypto, and the price of the ETF shares goes up and down in concert with the spot price of your chosen coin.
Spot ETFs are naturally more intuitive for investors, and more transparent as well – but you still have to ride the volatility of the crypto market. And the SEC has serious concerns about market manipulation when it comes to crypto. They’ve finally caved in and allowed spot Bitcoin ETFs, but only from a handful of companies thus far. Others are finding it difficult to get approval.
Why Do I Want An Ethereum ETF?
Bitcoin is easily the most established digital coin out there, but Ethereum – the No. 2 coin in terms of global market cap – is more than just a coin: it’s a platform for a wider range of decentralized applications. You can do all that DeFi (Decentralized Finance) stuff, and you can deal in NFTs (Non-Fungible Tokens) if you like.
There are other reasons to get into Ethereum as opposed to Bitcoin. But as far as ETFs are concerned, this is a great way to invest in cryptocurrency using your typical standard investment account, rather than going through the crypto exchange. This lets you diversify your portfolio in a more secure and more convenient manner, and it may save you money in taxes as well.
What Ethereum ETFs Can I Buy Today?
If you’re in the U.S. and you’re reading this before the SEC approves those spot Ethereum ETFs, you’ll have to settle for futures-based ETFs at the moment. There were nine of these ETFs on the original list that the SEC approved back in October, including three products from ProShares alone:
- Ether Strategy (EETH)
- Bitcoin & Ether Equal Weight Strategy (BETE)
- Bitcoin & Ether Market Cap Weight Strategy (BETH)
When Will the SEC Approve Ethereum Spot ETFs?
May 23. That’s according to the latest reports from Standard Chartered Bank as we go to press, although JPMorgan said last week that the chances of this happening by May were “not higher than 50%.”
May 23 happens to be the SEC’s deadline for approving the ARK 21Shares application from Cboe’s BZX exchange.
The market seems to think it’ll happen.
Prices for Ethereum surged roughly 10% after the SEC approved those Bitcoin spot ETFs. As we go to press, Ethereum is up about 20% since BlackRock filed their ETF application on November 16; Standard Chartered says the price could rise some 70% by May, up above $4,000.
Not everyone is convinced.
TD Cowen Washington Research Group said this past Monday that approval was unlikely “until late 2025 or early 2026.” The reasoning is political; progressive Democrats are said to be unhappy with the SEC over its approval of spot Bitcoin ETFs.
While we wait for the SEC to make their decision, there’s nothing stopping you from loading up on futures-based Ethereum ETFs. Just remember as always that speculative investments aren’t the be-all and end-all for crypto, especially Ethereum.
Use the coins and the platform wisely, and stay tuned to Bookmakers Review for more ETF news as it becomes available.
