Traders who want to buy and sell the cryptocurrency Ethereum can now use exchange-traded funds (ETFs) to do so. The best Ethereum ETFs make it easy to trade the second-most-popular cryptocurrency through a traditional broker rather than more complex cryptocurrency exchanges.
The Securities and Exchange Commission (SEC) approved spot Ethereum ETFs in May 2024, following the approval of Bitcoin ETFs in January. Ethereum ETFs began trading in July, and by using an Ethereum ETF, traders can purchase the cryptocurrency without taking custody of the coin or working with cryptocurrency exchanges with sometimes dubious security.
Here are some of the best Ethereum ETFs, including their performance and annual fees.
Top Ethereum ETFs
| Fund (ticker) | YTD performance | Expense ratio |
|---|---|---|
| iShares Ethereum Trust (ETHA) | -32.3% | 0.12% |
| Fidelity Ethereum ETF (FETH) | -32.3% | 0%* |
| Bitwise Ethereum ETF (ETHW) | -32.4% | 0.20% |
| VanEck Ethereum ETF (ETHV) | -32.5% | 0.20% |
| Franklin Ethereum ETF (EZET) | -32.4% | 0%** |
| Invesco Galaxy Ethereum ETF (QETH) | -32.5% | 0.25% |
Source: ETF.com. Data as of Sept. 11, 2024.
*On Jan. 1, 2026, this fund will start charging 0.25 percent annually.
**On Feb. 1, 2025, this fund will start charging 0.19 percent annually.
These spot EThereum ETFs track the price of the cryptocurrency on the same percentage basis, if they trade at different fund prices. If Ethereum rises 2 percent, these funds should rise a similar amount. So these ETFs have all performed comparably since approval.
So which is the best fund for you? Since their performance is largely the same and they own the same underlying asset, the best ETF is one that offers you the lowest expense ratio. It’s a similar situation with index funds that track major indexes such as the S&P 500. If the funds track the same index, then your best pick is the fund that charges the lower costs.
Much like when new Bitcoin funds were offered, a few of these new Ethereum funds are offering no expense ratio for a limited period. A few fund managers may be trying to build up assets and investors quickly, but those fees will eventually revert after an initial period of low fees expires.
The ETFs’ fees are more than competitive with trading Ethereum directly at most brokerages and crypto exchanges, meaning it’s easier and cheaper to buy your cryptocurrency through a fund. You’ll be able to trade with an existing broker without the hassle of a new crypto account.
Should you invest in Ethereum ETFs?
The advent of Ethereum ETFs doesn’t mean that the popular cryptocurrency is a buy, of course, just that it’s now easier and cheaper to do so. But the funds do offer a good way for traders to wager on the digital currency if they were already planning to do that, while avoiding some of the security headache of safeguarding and securing cryptocurrency.
Those thinking of investing in Ethereum should consider what SEC chief Gary Gensler said in January when his agency approved Bitcoin ETFs. He warned: “Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto.”
Like Bitcoin, Ethereum has been tremendously volatile since it debuted, making it an attractive trading vehicle for skilled traders. It’s even done well for those who have bought and held a stake. But volatility can be rough on inexperienced traders, leading them to buy high and sell low, as the volatility scares them and then saps their resolve to continue holding when the coin hits a low.
Like most cryptocurrencies, Ethereum is not backed by the hard assets or cash flow of an underlying entity. The only thing that supports its price is the sentiment of traders, who believe they can sell it to another trader for more money later. This type of strategy is what investing experts call the “greater fool theory of investing,” as traders only make money selling an asset to someone else who is more optimistic about its prospects and price potential than they are.
For this reason and others, legendary investor Warren Buffett has stayed clear of cryptocurrency, and has warned about others such as Bitcoin, which he called “probably rat poison squared.”
Where can you buy the best Ethereum ETFs?
Ethereum ETFs are typically available at any broker that allows customers to buy stocks or funds on a major U.S. exchange. The best brokers for stock trading let investors buy any available ETF with no commission, so you can trade in and out of a position at a low cost.
Bottom line
The ability to trade spot Ethereum ETFs makes it easy and cheap for traders to take a stake in the digital currency at their usual broker without needing a specialized account at a crypto exchange. These funds may make Ethereum a more attractive option for traders, perhaps leading to greater liquidity and acceptance of the cryptocurrency as a legitimate investment.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
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