After years of regulatory hurdles and numerous amendments to registration documents, Ethereum spot ETFs are finally entering the market. The Chicago Board Options Exchange (Cboe) recently announced that five Ethereum spot ETFs will be listed on its platform on July 23. These include the Fidelity Ethereum Fund, Franklin Ethereum ETF, Invesco Galaxy Ethereum ETF, VanEck Ethereum ETF, and the 21Shares Core Ethereum ETF.
Four other Ethereum spot ETFs are expected to trade on Nasdaq or the New York Stock Exchange (NYSE) Arca. While these exchanges have not yet made official announcements, listings are anticipated in the near future.
This highly anticipated launch marks a pivotal moment for the cryptocurrency market, offering opportunities for millions of institutional and retail investors in the United States. These ETFs follow the footsteps of the 11 Bitcoin spot ETFs, which have accumulated over $54 billion in assets under management since their introduction in January and have seen a 47% surge this year alone. Below is a comprehensive guide to Ethereum spot ETFs.
Understanding Ethereum Spot ETFs
ETH is the native cryptocurrency of the Ethereum blockchain. Legally, ETH is classified as a commodity, and the corresponding ETFs are considered securities, though the U.S. SEC has expressed reservations about this classification.
ETFs first entered the market in 1993. These funds pool a basket of securities—such as various energy stocks—and their prices align with the indices they track. Listed on exchanges, they trade during market hours, functioning similarly to stocks.
Spot Ethereum ETFs will track the current (spot) price of ETH. These products enable investors to gain exposure to the cryptocurrency without needing a crypto wallet. The ETFs will be structured as grantor trusts, meaning investors will own shares in the trust that holds the underlying ETH.
Issuers and Associated Fees
Eight asset management firms plan to launch Ethereum ETFs, and fee structures for nine proposed Ethereum spot ETFs have been fully disclosed. The specifics are summarized in the chart below (note: chart description not reproduced as per rules).
In terms of underlying mechanics, these funds are nearly identical. Each ETF is sponsored by a reputable institutional party, holds spot ETH with qualified custodians, and relies on core teams of professional market makers to create and redeem shares. Each fund adheres to the same investor protection standards, including insurance against broker bankruptcy and cybersecurity risks.
For most investors, the deciding factor will be fees. Eight of the nine ETFs charge management fees between 0.15% and 0.25%. The sole exception is the Grayscale Ethereum Trust (ETHE), which charges a 2.5% management fee.
Most, though not all, Ethereum ETFs are temporarily waiving or reducing fees to attract investors. The Grayscale Ethereum Trust and the Invesco Galaxy Ethereum ETF (QETH) are exceptions to this trend.
Where Can You Purchase Ethereum ETFs?
In short: nearly all mainstream brokerage platforms. Each ETH spot ETF launching in the last week of July has received regulatory approval to trade on at least one major U.S. exchange, specifically Nasdaq, NYSE Arca, or Cboe BZX.
Everyday investors do not trade directly on these exchanges. Instead, they use brokerage platforms—such as Fidelity, E*TRADE, Robinhood, Charles Schwab, and TD Ameritrade—as intermediaries.
Once the ETH ETFs are listed on public exchanges, they are expected to be available for trading through all major brokerages and other institutions.
Will Spot Ethereum ETFs Offer Staking?
Perhaps, but not in the short term.
Staking involves depositing ETH into a validator node on the Ethereum Beacon Chain. Staked ETH earns a percentage of network fees and other rewards but risks being "slashed"—or having staked collateral confiscated—if the validator acts improperly or fails.
Staking is attractive because it can significantly enhance yields. According to StakingRewards.com, the annualized yield was approximately 3.7% as of July 19.
Earlier this year, several issuers—including Fidelity, BlackRock, and Franklin Templeton—sought regulatory approval to incorporate staking features within their Ethereum spot ETFs. The SEC denied these requests.
According to several anonymous sources involved in the discussions, the core issue was liquidity. Staked ETH typically requires several days to be withdrawn from the Beacon Chain. This poses a problem for issuers, who need to redeem ETF shares promptly upon request.
Informed sources indicate that issuers are still exploring ways to add staking functionality to existing Ethereum spot ETFs—potentially by maintaining a "buffer" of liquid spot ETH—but a viable solution is at least several months away. For now, ETH ETFs will not offer staking.
Why Invest in an Ethereum ETF?
Bitcoin and Ether represent units of ownership in their underlying blockchains and thus their value. Beyond that, they differ significantly.
Bitcoin may serve as a long-term hedge against inflation, while Ethereum is closer to a technology investment. As Vetle Lunde, Senior Analyst at K33 Research, noted in an interview, the blockchain's primary premise is "to eliminate intermediaries, enable 24/7 operation of financial services like transactions and lending, and support tokenization, digital collectibles, and digital identity."
Although the crypto market is currently highly correlated, this may not always be the case. Therefore, Ethereum spot ETFs allow investors to meet diversification needs within their portfolios.
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Will They Be as Popular as Spot Bitcoin ETFs?
Bloomberg ETF analyst James Seyffart suggests that demand for Ethereum spot ETFs will be about 20% that of spot Bitcoin ETFs. This is because ETH's market capitalization is approximately one-third that of BTC. Additionally, these ETFs lack a key advantage of holding ETH directly: investors cannot stake their holdings to generate yield.
Nevertheless, Seyffart asserts that even on a smaller scale, they will be "highly successful" by traditional ETF launch standards. Similarly, K33 Research predicts inflows of $4 billion within the first six months of trading, equating to about one-quarter of the inflows seen with Bitcoin spot ETFs.
Leah Wald, CEO and President of Cyberpunk Holdings, emphasized in an interview that success should be evaluated based on performance six months after trading begins, not just on the "first day" or initial weeks. She noted that these products are launching during the summer, a traditionally "slow season" for trading. Moreover, success should be measured by trading volume and spreads, not just inflows, as healthy metrics in these areas signal potential for future growth in assets under management (AUM) and reassure investors about allocating funds to these new securities.
Who Will Invest in These ETFs?
Institutional investors, such as hedge funds, pension funds, banks, and endowments. Retail investors can also gain exposure through direct purchases or via portfolio allocations made by wealth advisors. The latter group is expected to dominate in the first six months of trading, as data from spot Bitcoin ETFs indicate that over 80% of total AUM came from non-professional investors.
How Will ETFs Impact the Crypto Market?
If K33's prediction of $4 billion in inflows over six months proves accurate, it would mean that by year's end, roughly 1% of the circulating ETH supply will be held by ETFs. Lunde suggests that this accumulation "bodes well" for boosting ETH's price in the second half of the year.
Historical precedent indicates that these inflows will also benefit the overall market. According to K33 data, new capital entering Bitcoin via ETFs increased the total crypto market capitalization by 46% in 2024. Lunde expects these products "could further expand the overall market." Additionally, Bitcoin ETF investors "have proven resilient to volatility, with stable flows even during deep corrections," suggesting that new investors interested in long-term exposure may be drawn to ETFs.
Finally, the participation of traditional finance giants like BlackRock in issuing these products signals a deeper foray into the crypto space. This provides the industry with "solid and much-needed endorsement."
Frequently Asked Questions
What is an Ethereum spot ETF?
An Ethereum spot ETF is an exchange-traded fund that tracks the current market price of Ether (ETH). It allows investors to gain exposure to ETH's price movements without directly holding the cryptocurrency, using a structure similar to traditional stock ETFs.
How do Ethereum ETFs differ from Bitcoin ETFs?
While both track cryptocurrencies, Ethereum ETFs are based on ETH, which supports a broader ecosystem including smart contracts and decentralized applications. Bitcoin ETFs track BTC, which is primarily seen as a store of value. Additionally, Ethereum's potential for staking (though not initially available in ETFs) offers a yield generation aspect not present with Bitcoin.
Can I stake my ETH through these ETFs?
No, at least not initially. The SEC has not approved staking for any of the launched Ethereum spot ETFs. Issuers are exploring solutions, but any implementation is likely several months away.
What are the main risks of investing in an Ethereum ETF?
Key risks include market volatility, regulatory changes, and the potential for technological issues within the Ethereum network. Additionally, since investors don't hold the actual ETH, they miss out on direct ownership benefits like staking.
Where can I buy these ETFs once they are live?
They will be available through most major brokerage platforms in the U.S., including Fidelity, Charles Schwab, Robinhood, and others, once the ETFs are listed on supported exchanges like Nasdaq, NYSE Arca, or Cboe.
Will these ETFs help increase the price of ETH?
Many analysts believe that increased demand from ETF inflows could positively impact ETH's price, similar to the effect observed with Bitcoin ETFs. However, market conditions and broader economic factors will also play significant roles.