Investing in cryptocurrencies like Bitcoin and Ethereum has gained significant popularity in recent years. While buying and holding the actual coins can be a viable investment strategy, many investors prefer a more traditional approach through exchange-traded funds (ETFs).
Ethereum ETFs offer a convenient and regulated way to gain exposure to the price movements of Ethereum without the complexities of managing a digital wallet.
In this comprehensive guide, we will explore the top Ethereum ETFs available in Canada, USA, their features, fees, and how to buy them.
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Most Popular Ethereum ETFs
ETF Name: Purpose ETHR ETF
The Purpose Ether ETF (ETHH) is a well-established Ethereum ETF in Canada. It aims to provide investors with exposure to the price of Ethereum by holding the cryptocurrency in cold storage.
ETF Name: Fidelity Advantage Ether ETF
Invests directly in ether, which is safely stored using Fidelity’s in-house storage services.
Provides exposure to one of the world’s largest cryptocurrencies.
Cryptocurrency may offer diversification benefits when added to a portfolio.
Eligible for registered accounts, including RRSPs and TFSAs.
ETF Name: CI Galaxy Ethereum ETF
CI Galaxy Ethereum ETF (ETHX) was among the first Ethereum ETFs to be launched in Canada. This ETF aims to replicate the performance of Ethereum by closely tracking its price movements. With a low management fee of 0.40%, ETHX offers a cost-effective option for investors. It is available in both Canadian dollar (ETHX.B) and US dollar (ETHX.U) versions
ETF Name: Grayscale Ethereum Trust
Grayscale Ethereum Trust is solely and passively invested in ETH, enabling investors to gain exposure to ETH in the form of a security while avoiding the challenges of buying, storing, and safekeeping ETH, directly. This Trust is the next best ETH investment for US clients.
International Trust – OTC | Best For US Investors.
Ticker Symbol: ETHE
What is an Ethereum ETF?
An Ethereum ETF is an exchange-traded fund that tracks the price movements of Ethereum, the second-largest cryptocurrency in terms of market capitalization.
ETFs are investment funds traded on stock exchanges, providing investors with an easy and regulated way to invest in a diversified portfolio of assets.
Ethereum ETFs allow investors to gain exposure to Ethereum’s price fluctuations without directly owning the cryptocurrency.
The Best Ethereum ETFs in USA
As of now, the United States Securities and Exchange Commission (SEC) has not approved any Ethereum exchange-traded funds (ETFs) specifically.
However, there are some options for investors who are interested in gaining exposure to Ethereum through ETFs. Here are a few notable ones:
- Grayscale Ethereum Trust (ETHE): Although not an ETF, it is a popular investment vehicle that allows investors to gain exposure to Ethereum. ETHE is a publicly traded trust offered by Grayscale Investments, which holds Ethereum and issues shares to investors.
- Amplify Transformational Data Sharing ETF (BLOK): While not solely focused on Ethereum, BLOK is an actively managed ETF that invests in companies involved in blockchain technology. Ethereum is one of the major cryptocurrencies in this sector, so BLOK indirectly provides exposure to Ethereum.
- Innovation Shares NextGen Protocol ETF (KOIN): KOIN is another ETF that invests in companies involved in blockchain technology. While it is not Ethereum-specific, it provides exposure to various cryptocurrencies, including Ethereum.
It’s crucial to conduct thorough research and consult with a financial advisor before making any investment decisions.
Additionally, keep in mind that the cryptocurrency market is highly volatile, and investing in ETFs comes with its own risks and considerations.
The Best Ethereum ETFs in Canada
1. CI Galaxy Ethereum ETF (ETHX)
The CI Galaxy Ethereum ETF (ETHX) was among the first Ethereum ETFs to be launched in Canada. This ETF aims to replicate the performance of Ethereum by closely tracking its price movements. With a low management fee of 0.40%, ETHX offers a cost-effective option for investors. It is available in both Canadian dollar (ETHX.B) and US dollar (ETHX.U) versions, and it is eligible for various registered accounts such as RRSP, RRIF, and TFSA.
2. Evolve Ether ETF (ETHR)
The Evolve Ether ETF (ETHR) is another popular option for investors seeking exposure to Ethereum. Like other Ethereum ETFs, ETHR holds Ethereum and tracks its price movements. It offers 100% cold storage for enhanced security and is available in both Canadian dollar (ETHR) and US dollar (ETHR.U) versions. With a management fee of 0.75%, ETHR provides a competitive option for investors.
3. Purpose Ether ETF (ETHH)
The Purpose Ether ETF (ETHH) is a well-established Ethereum ETF in Canada. It aims to provide investors with exposure to the price of Ethereum by holding the cryptocurrency in cold storage. ETHH offers the flexibility of being available in both Canadian dollar (ETHH.B) and US dollar (ETHH.U) versions. It is suitable for various registered accounts and has a management fee of 1.00%.
Complete Ethereum ETFs List
| ETF | Ticker (TSX) | Management Fee | Cold Storage | Country |
| CI Galaxy Ethereum ETF | ETHX.B / ETHX.U | 0.40% | 100% | Canada |
| Evolve Ether ETF | ETHR / ETHR.U | 0.75% | 100% | Canada |
| Purpose Ether ETF | ETHH.B / ETHH.U | 1.00% | 100% | Canada |
| Fidelity Advantage Ether ETF | FETH | 0.40% | 100% | Canada |
| 3iQ Coinshares Ether ETF | ETHQ | 1.00% | 100% | Canada |
| Grayscale Ethereum Trust(not an ETF) | ETHE | 2.50% | 100% | OTC – International |
Benefits of Investing in Ethereum ETFs
Investing in Ethereum ETFs offers several benefits for investors.
1. Convenience and Accessibility
Ethereum ETFs provide a convenient way for investors to gain exposure to Ethereum without the need to set up and manage a digital wallet. Investors can buy and sell ETF shares through their existing brokerage accounts, making it accessible to a wider range of investors.
2. Regulatory Oversight and Security
ETFs operate within a regulated framework, providing investors with a level of oversight and security that may not be present in the cryptocurrency market. Ethereum ETFs also utilize cold storage, where the cryptocurrency is held offline, reducing the risk of cyberattacks.
3. Diversification and Risk Management
By investing in Ethereum ETFs, investors can gain exposure to the price movements of Ethereum while enjoying the benefits of diversification. ETFs typically hold a diversified portfolio of assets, reducing the risk associated with investing in a single cryptocurrency.
4. Tax Efficiency
Investing in Ethereum ETFs within registered accounts such as RRSPs and TFSAs can offer tax advantages. Investors can potentially shield their profits from taxes and benefit from tax-free growth within these accounts.
How to Buy Ethereum ETFs in Canada
To buy Ethereum ETFs in Canada, investors can use various online brokerage platforms. Here are some popular options:
- Questrade – Questrade offers commission-free ETF purchases, making it an attractive choice for investors looking to minimize transaction costs.
- Wealthsimple Trade – Wealthsimple Trade allows investors to trade ETFs, including Ethereum ETFs, with no commissions. It offers a user-friendly interface and is suitable for beginners.
- Virtual Brokers – Virtual Brokers is another online brokerage platform that provides access to a wide range of ETFs, including Ethereum ETFs. It offers competitive trading fees and advanced trading features for more experienced investors.
Before choosing a brokerage platform, investors should consider factors such as trading fees, account types, user interface, and customer support to find the platform that best suits their needs.
Risks of Investing in Ethereum ETFs
While Ethereum ETFs offer a convenient way to invest in Ethereum, it is important to be aware of the risks involved. Here are some key risks to consider:
1. Volatility and Price Fluctuations
Ethereum, like other cryptocurrencies, is known for its price volatility. Investing in Ethereum ETFs exposes investors to these price fluctuations, which can result in significant gains or losses.
2. Crypto Market Risks
The overall performance of the cryptocurrency market can impact the price of Ethereum ETFs. Factors such as regulatory changes, market sentiment, and technological developments in the cryptocurrency space can influence the value of Ethereum and, consequently, the performance of Ethereum ETFs.
3. Management Fees
Ethereum ETFs charge management fees, which can impact overall returns. Investors should carefully consider the fees associated with each ETF and evaluate their impact on investment performance.
4. Regulatory and Legal Risks
Regulatory changes or legal actions related to cryptocurrencies can affect the availability and trading of Ethereum ETFs. Investors should stay informed about regulatory developments and potential risks associated with the cryptocurrency market.
Ethereum ETF FAQ's
- What is an Ethereum ETF?
An Ethereum ETF (Exchange-Traded Fund) is a financial product that tracks the performance of Ethereum, the second-largest cryptocurrency by market capitalization. It allows investors to gain exposure to Ethereum without directly owning the cryptocurrency. - How does an Ethereum ETF work?
An Ethereum ETF operates like a traditional ETF, where a fund manager pools investors’ money and uses it to purchase Ethereum on their behalf. The ETF’s value is tied to the price of Ethereum, and investors can buy and sell shares of the ETF on the stock exchange. - What are the benefits of investing in an Ethereum ETF?
Investing in an Ethereum ETF offers several benefits. Firstly, it provides a convenient and regulated way for investors to gain exposure to Ethereum’s price movements. Additionally, it allows investors to diversify their portfolios by incorporating cryptocurrencies into their investment strategy. Lastly, an ETF eliminates the need for investors to directly hold or store Ethereum, simplifying the investment process. - Are Ethereum ETFs regulated?
Yes, Ethereum ETFs are regulated financial products. They are subject to the regulations and oversight of the relevant financial authorities in the jurisdiction where they are offered. This regulation helps protect investors and ensures that the ETF operates in a transparent and fair manner. - How can I invest in an Ethereum ETF?
To invest in an Ethereum ETF, you typically need to have a brokerage account. You can then search for the specific Ethereum ETF you want to invest in and place an order through your broker. The process is similar to purchasing stocks or other ETFs. - Are there any risks associated with Ethereum ETFs?
As with any investment, there are risks associated with investing in Ethereum ETFs. The value of the ETF can fluctuate based on the price movements of Ethereum, which can be highly volatile. Additionally, regulatory changes, technological risks, and market sentiment towards cryptocurrencies can also impact the value of the ETF. It’s important for investors to carefully consider their risk tolerance and conduct thorough research before investing. - Can I trade Ethereum ETFs on cryptocurrency exchanges?
No, Ethereum ETFs are traded on traditional stock exchanges, not on cryptocurrency exchanges. This means that you cannot directly buy or sell Ethereum ETF shares on platforms that specialize in trading cryptocurrencies. You need a brokerage account to trade Ethereum ETFs. - Are there any Ethereum ETFs available currently?
As of now, there are no Ethereum ETFs available in the United States. However, other countries like Canada and Brazil have approved Ethereum ETFs, and more countries may follow suit in the future. It’s important to check with your local financial regulations and investment options to see if Ethereum ETFs are available in your region. - Can I use an Ethereum ETF in my retirement account?
The availability of Ethereum ETFs in retirement accounts depends on the rules and regulations of the specific retirement account and the jurisdiction in which it operates. Some retirement accounts may allow investments in ETFs, including cryptocurrency-related ones, while others may have restrictions. It’s best to consult with a financial advisor or the administrator of your retirement account to understand the options available to you. - Should I invest in an Ethereum ETF or buy Ethereum directly?
The decision to invest in an Ethereum ETF or buy Ethereum directly depends on various factors, including your risk tolerance, investment goals, and familiarity with cryptocurrencies. Investing in an ETF offers convenience, diversification, and regulatory oversight. On the other hand, buying Ethereum directly gives you ownership and control over the cryptocurrency itself. It’s important to carefully evaluate your options and consider seeking professional advice before making any investment decisions.
Conclusion
Investing in Ethereum ETFs can be an attractive option for investors looking to gain exposure to the price movements of Ethereum in a convenient and regulated manner. The CI Galaxy Ethereum ETF, Evolve Ether ETF, and Purpose Ether ETF offer investors a range of options with varying management fees and features. By choosing a reputable online brokerage platform, investors can easily buy and sell Ethereum ETFs. However, it is important to consider the risks associated with investing in cryptocurrencies and to carefully evaluate each ETF’s fees and performance. As with any investment, conducting thorough research and consulting with a financial advisor is recommended to make informed investment decisions.
About This Article
Author: Stephen Masters – is a serial entrepreneur and international businessman, with a love for teaching the ways of wise investment. Stephen has worked in several countries in the fields of services marketing, strategic planning, trade, advertising, data science, and commodities. In his free time, he enjoys finding a city’s best taco truck, learning foreign languages, and backpacking.
Reviewed and edited by: Mark Prosz
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