How To Buy An Ether ETF

June 30, 2021

Ether doesn’t get quite as much attention as bitcoin.

It’s been around for a much shorter period of time and it’s a little harder to grasp exactly what it is. But the world’s second most valuable cryptocurrency has slowly made a name for itself as it’s grown in importance within the broader crypto space.

Ether is the native cryptocurrency of the Ethereum platform, a blockchain-based network designed to support decentralized applications. Ether is the currency that pays for the computing power necessary to run those applications.

 

Ether Price

 

Initial coin offerings (ICOs), decentralized finance (DeFi) and nonfungible tokens (NFTs) are some of the first use cases Ethereum has helped support, and if Ethereum proponents are to be believed, there are plenty more use cases to come. As demand for Ethereum applications grows, so too does the demand for ether.

While ether is a utility token, it’s also considered an investable asset by some. It’s different than bitcoin, which is treated as a store of value, much like gold. Rather, an investment in ether is a bet on the growth of the Ethereum ecosystem. The more applications that are built on top of the platform, the better ether should do.

Missing Ether ETF

Ether can be bought and sold just like bitcoin—on exchanges like Coinbase and others; with digital wallets like Venmo and PayPal; and through some brokerages like Robinhood and eToro.

Notably missing from the list are U.S.-listed ether ETFs. Just as the SEC has been reluctant to approve a bitcoin ETF, so too has it been reluctant to approve any other cryptocurrency ETFs—ether funds included. U.S. investors who would buy an ether ETF, were one available, have instead gravitated toward over-the-counter alternatives, such as the Grayscale Ethereum Trust (ETHE).

ETHE is not an ETF by any means, but it can be bought and sold through a U.S. brokerage account as simply as a U.S.-listed ETF—a feature that, for many investors, makes up for the fact that the product sometimes trades at large premiums and discounts to its net asset value.

International Options

On the other hand, international investors have had more choice. Ether exchange-traded products have traded in Europe for over three years, and earlier this year, the first ether ETFs began trading in Canada.

For some U.S. investors, something like ETHE is preferable to the international ether ETFs available, because the latter can be difficult to get ahold of. Major U.S. brokerages typically require special accounts to trade international securities, a category that includes ether ETFs listed in Canada, Europe and elsewhere.

But for investors with these accounts, buying an international ether ETF is an option, and could offer a superior experience to the more unpredictable ETHE and its ilk.

For investors in other countries, if it’s an option, domestically listed ether ETFs are generally the easiest to buy. Otherwise, the same considerations as those of U.S. investors apply—a special account may be necessary to purchase internationally listed ether products.

See the table below for a list of the currently available ether ETFs. If needed, contact your broker or financial advisor for information on how to trade these products and the risks associated with them.

 

Fund Ticker AUM (million $USD) Country of Listing
Ether Tracker Euro ETHEREUM XBTE 825.70 Sweden
Ether Tracker One ETHEREUM XBT 450.50 Sweden
CI Galaxy Ethereum ETF ETHX 274.00 Canada
3iQ CoinShares Ether ETF ETHQ  172.90 Canada
Purpose Ether ETF ETHH 118.19 Canada
CoinShares Physical Ethereum ETHE  100.15 Switzerland
ETHetc - ETC Group Physical Ethereum ETP ZETH  89.01 Germany
VanEck Vectors Ethereum ETN VETH  52.83 Germany
Ether ETF ETHR 29.90 Canada

Sources: Issuers, Bloomberg; data as of June 29, 2021

 

Email Sumit Roy at [email protected] or follow him on Twitter @sumitroy2

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