- After approving spot ETFs for Bitcoin, the largest cryptocurrency, in January, and watching them rake in almost US$60 billion in assets, the U.S. Securities and Exchange Commission has approved the CBOE, Nasdaq and NYSE exchanges to trade in ETFs tracking Ethereum, Bitcoin’s only real competitor
- Nine issuers are looking to bring Ethereum ETFs to market, including VanEck, ARK Investments/21Shares and BlackRock
- Ethereum’s native currency, ETH, has gained 115.19 per cent year-over-year, and 1,552.35 per cent since 2019, last trading at C$5,363.76 per token
After approving spot ETFs for Bitcoin, the largest cryptocurrency, in January, and watching them rake in almost US$60 billion in assets, the U.S. Securities and Exchange Commission (SEC) has approved the CBOE, Nasdaq and NYSE exchanges to trade in ETFs tracking Ethereum, Bitcoin’s only real competitor.
Ethereum is a blockchain network that enables parties to do business with one another through smart contracts, which are agreements that execute based on agreed-upon criteria without the need for a middleman. The network is host to some of the largest and most well-known projects in the cryptocurrency space, including UniSwap, Curve, Chainlink and Decentraland. Ethereum’s native currency, ETH, has gained 115.19 per cent year-over-year and 1,552.35 per cent since 2019, last trading at C$5,363.76 per token, granting it a market capitalization of about C$650 billion, almost three times less than Bitcoin’s C$1.9 trillion.
While financial institutions still need to have individual fund registrations approved before trading in Ethereum ETFs can begin – nine applications are under consideration including VanEck, ARK Investments/21Shares and BlackRock – the SEC’s open-mindedness towards crypto in 2024 is in stark contrast to its historical skepticism towards the speculative asset class, opening an increasing number of investors up to the idea of holding an allocation. Canadians, for their part, have had access to Bitcoin and Ethereum ETFs since 2021, and benefit from products from reputable providers to gain exposure.
With eyes on catching short-term gains tied to individual fund approvals by the SEC, as well as aligning yourself with crypto’s potential for outsized long-term returns, let’s break down how Canada’s Ethereum ETFs stack up against one another.
The 3iQ Ether Staking ETF
- Ticker: ETHQ.
- Net asset value: C$72.6 million.
- Management expense ratio: 1.56%.
- Differentiator: Unitholders can earn yield through Ethereum staking, which involves locking up investments in ETH to help to run the network. The fund was also first to market with staking capabilities.
CI Galaxy Ethereum ETF
- Ticker: ETHX.B.
- Assets under management: C$654.7 million.
- Management expense ratio: 0.4%.
- Differentiator: Galaxy is one of the pre-eminent crypto players across capital markets, asset management and infrastructure solutions.
Evolve Ether ETF
- Ticker: ETHR.
- Assets under management: C$91.8 million.
- Management expense ratio: 0.75%.
- Differentiator: The fund is the first in the world to offer exposure to the Ethereum network in the form of an ETF.
Fidelity Advantage Ether ETF Fund
- Ticker: FETH.
- Assets under management: C$19.2 million.
- Management expense ratio: 0.95%.
- Differentiator: Besides being one of the world’s most well-respected financial institutions with more than 75 years of history and more than 50 million individual clients, Fidelity is also a crypto pioneer, having entered the industry all the way back in 2014.
Purpose Ether ETF
- Ticker: ETHH.
- Assets under management: C$478.7 million.
- Management expense ratio: Up to 1.5%.
- Differentiator: Investors who open a position in ETHH have the option to complement this exposure with the Purpose Ether Yield ETF (TSX:ETHY), which writes covered calls and currently pays out an annual yield of more than 9 per cent. Unlike ETHQ, whose yield is reflected in unit price appreciation, ETHY pays its distributions in cash.
Whether you’re a novice or an enthusiast, cryptocurrencies remain a new and volatile asset class with a little more than 15 years of market history, hardly enough for investors to expect reliable capital appreciation, despite the multitude of crypto millionaires who attract many retail participants into the space. This is why it’s essential to have a plan for any dollars you intend to allocate, ensuring that you minimize avoidable regret through awareness of the range of possible outcomes.
If you’re interested in finding out whether crypto suits your investment needs, check out last year’s “How to invest in cryptocurrency.”
Join the discussion: Find out what everybody’s saying about Bitcoin, Ethereum and other cryptocurrencies on Stockhouse’s Blockchain and Cryptocurrency Bullboard, and check out the rest of Stockhouse’s stock forums and message boards.
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(Top photo: Adobe Stock)