5 Best Ethereum ETFs to Invest in 2024: Discover the Leading Options for Growth and Stability

Introduction

There’s a lot of excitement in the cryptocurrency ecosystem about Ethereum, especially since, for the first time since 2021, it passed the $4000 threshold in March 2024. Currently, 1ETH is trading around $2,700.

• One of the unique features of Ethereum is that, unlike Bitcoin, whose major value proposition is a store of value and an inflation-hedge asset (like gold), Ethereum is a decentralized smart contract platform.
• The Ethereum network allows users to build apps on the Ethereum blockchain. The ETH token is responsible for powering activities within the Ethereum network.
• With the next crypto bull cycle in view, the US Securities and Exchange Commission (SEC) recently approved the sale of spot Ethereum Exchange-Traded Funds (ETFs).
• This approval has stirred up excitement within the crypto community, and many people have rumored it to be one of the major catalysts for the next crypto bull run.
• An Ethereum ETF is a financial product aimed at tracking the price of Ethereum. This tracking process allows Ethereum investors to buy and sell ETH shares on traditional stock exchanges.
• Crypto and non-crypto investors prefer to invest in Ethereum ETFs instead of holding actual ETH because the former offers them liquidity, simplicity, and accessibility.
• Ethereum ETFs offer several regulatory advantages to non-crypto investors who do not want to manage digital assets directly.

In other words, it is one of the safest and simplest ways to benefit from the price increase of Ethereum whether you are a crypto investor or not.

Therefore, if you need serious exposure to Ethereum, investing in Ethereum ETFs is a good way to start. Below are the top five Ethereum ETFs to invest in 2024.

1. Grayscale Ethereum Trust (ETHE)

Grayscale Investments, LLC, a subsidiary of Digital Currency Group, manages the Grayscale Ethereum Trust (ETHE).

ETHE is a very prominent investment vehicle, especially for those who want some exposure to Ethereum without having to directly manage, buy, or store the cryptocurrency. As of May 2024, the Trust holds more than $10.1 billion in assets.

It is necessary to note that ETHE is not a traditional spot or futures ETF. It is a trust that directly holds Ethereum. The implication is that the value of ETHE shares is directly linked to Ethereum's current (spot) price.

Therefore, investors own shares representing Ethereum portions of the Trust’s holdings.

The Grayscale Ethereum Trust is a top choice for Ethereum exposure. It has a substantial asset base and is working hard to transition into an ETF structure.

Investing in ETHE has benefits, which include transparency and regulatory oversight. The Trust's shares are registered under Section 12(g) of the Securities Exchange Act 1934.

Also, investing in ETHE means bypassing the complexities of directly buying or managing Ethereum tokens.

2. XBT Provider Ethereum Tracker One (COINETH)

COINETH, XBT Provider's Ethereum Tracker One, is one of the top Ethereum exchange-traded products (ETPs). Recent reports have shown that COINETH holds Ethereum assets worth nearly $400 million.

Its significant Ethereum holding has placed it among the largest Ethereum-backed ETPs globally​.

COINETH is a spot-based Exchange-Traded Note (ETN) that tracks Ethereum's price closely without using derivatives like futures contracts​.

By investing in COINETH, you’ll own shares of the ETN backed by actual holdings of Ethereum.

COINETH’s Ethereum backing distinguishes it from products that rely on futures contracts. Hence, it gives investors direct access and exposure to Ethereum’s current market price.

3. CI Galaxy Ethereum ETF (ETHX.B) 

CI Galaxy Ethereum ETF (ETHX.B) is popular for its digital assets, blockchain technology, and cryptocurrency expertise. CI Global Asset Management manages Galaxy Digital, and Galaxy Digital Capital Management LP is the subadvisor.

ETHX.B is a Canadian spot-based ETF that holds the actual Ethereum tokens. Hence, it offers investors direct exposure to the spot price of Ethereum. Currently (May 2024), ETHX.B has a total net asset of approximately 511.34 million CAD.

By investing in ETHX.B, you buy shares of an ETF that directly holds Ethereum, not future contracts or derivatives.

Using this structure, you gain exposure to Ethereum’s performance without directly buying or managing cryptocurrency.

ETHX.B is a wonderful option for having direct exposure to Ethereum. The Ethereum ETF trades on the Toronto Stock Exchange (TSX) in both Canadian dollars (CAD) and US dollars (USD), providing flexibility for investors.

However, it is only appropriate for investors who can handle potential losses because of the high volatility of Ethereum.

4. 21Shares Ethereum Staking ETP 

The 21Shares Ethereum Staking ETP (AETH) is an innovative product that tracks the investment results of Ethereum and generates additional returns through staking.

21Shares AG, a major cryptocurrency ETPs provider, manages AETH. AETH holds assets worth approximately $427 million when writing this article.

This product offers exposure to Ethereum with the potential for earning staking rewards, just like earning interest in traditional finance.

AETH has a strong Ethereum backing, and it is a spot-based product. The company directly holds Ethereum. Hence, it exposes investors to ETH's current market price, including the asset’s potential staking rewards.

AETH is traded on many exchanges, making it easily accessible to investors globally.

5. Purpose Ether ETF (ETHH)

The Purpose Ether (ETHH), the world’s first physically settled Ether ETF, provides a way for its investors to have their own Ether (ETH) in their investment accounts.

Purpose Investments manages the Purpose Ether (ETHH), which offers exposure to Ethereum by holding the cryptocurrency physically. The company ensures that your investment is linked to the actual market price of Ethereum.

The Purpose Ether ETF currently has approximately $270 million in net assets and a 60.82% investment return. ETHH holds 100% physically settled Ether by storing it securely offline in "cold" storage and disconnecting it from the internet to avoid hacks and scams.

ETHH only uses “hot” wallets for transitory or temporary Ether transactions. Most of the ETF’s holdings are in cold storage for security reasons. Cold storage is one of the best ways to store cryptocurrencies.

With this product, you can track Ethereum’s spot price and invest in Ether directly instead of going through future contracts or derivatives. Therefore, your investment will be closely following the current market price of Ethereum.

Also, ETHH wants to generate returns by harvesting volatility-rich premiums. This move will potentially produce additional yields beyond ETH price appreciations.

Conclusion

As with any new asset class, Ethereum ETFs will come with a lot of volatility, both in the crypto itself and in the companies that develop it.

However, if you choose to invest in Ethereum ETFs, there are two important things to remember.

1. Make small bets.
2. Focus on the long-term potential for Ethereum and the blockchain technology at large.

Disclaimer: This article is not financial investment advice. Ensure you conduct proper research and be willing to take risks before venturing into serious investments. To see other noteworthy investments with less risk, click on this link.