Blog → Ethereum ETFs: A Detailed Explanation of the Spot and Futures Products

Ethereum ETFs: A Detailed Explanation of the Spot and Futures Products

Victor Olanrewaju
Last Updated:
June 15, 2024
June 15, 2024

Table of Contents

2024 has been an interesting year for cryptocurrencies as traditional financial institutions continue to integrate these digital assets into their ecosystem. First, the U.S. SEC gave the go-ahead for the launch of Bitcoin ETFs in January. 

On May 23, Ethereum (ETH) joined Bitcoin as the second cryptocurrency to have a spot exchange-traded fund given the green light by the SEC. Bitcoin ETFs’ approval came with good news for BTC’s price as it rallied to a new all-time high in March.

However, ETH has not had the same reaction with many attributing the unimpressive price action to the delay in live trading the approved Ethereum ETFs. In this article, you will learn what an Ethereum ETF is, and everything you need to know about the financial instrument.

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What is an Ethereum ETF?

An Ethereum ETF is not the same as ETH the cryptocurrency.  With the ETF, traditional investors can have exposure to the altcoin but do not directly own it. However, the price of an Ethereum ETF is influenced by the performance of the cryptocurrency.

Here are a few notable things to know about Ethereum ETFs

  • An investor in an Ethereum ETF does not own ETH nor does he/she have a crypto wallet address. However, the investor holds funds tied to the asset.
  • Trading of Ethereum ETFs is not throughout the day like it is in the cryptocurrency market. Instead, the products can only be traded during working hours Monday through Friday.
  • Traders of Ethereum ETFs get charged a fee depending on the issuer. But they do not pay gas fees, also known as transaction fees for trading the instrument.

However, there are two types of Ethereum ETF. The first is the Ethereum futures ETF and the other one is the Ethereum spot ETF. Despite being linked to the crypto project, these products are entirely different.

Difference Between Spot and Futures Ethereum ETFs

The difference between an Ethereum spot and a futures ETF is almost the same as the way you will compare stop and futures trading. 

In traditional investing, a spot ETF means that an asset invests directly in the asset. In this case, the price fluctuation of the ETF is similar to the price movement of the cryptocurrency involved. For example, if the price of ETH increases by 5.50% in the last 24 hours, then the value of an Ethereum ETF would follow a similar path.

But for futures ETFs, it is not the same as it is more speculative. In simple terms, an Ethereum futures ETF implies that a trader is buying or selling into a fund that holds a contract at a specific price and is targeted at a particular date. Check the table below to see the specific differences between a spot Ethereum ETF and a futures product.

Spot Ethereum ETFs vs Ethereum Futures ETFs

Furthermore, it is important to note that Ethereum futures ETFs have been existing since 2023. Some of the issuers of the product include Bitwise (BITW), VanEck (EFUT), ProShares (EETH), Ark Invest/ 21Shares (ARKZ), and Valkyrie (BTF). 

However, unlike their futures counterparts, spot Ethereum ETFs have not started trading live. According to SEC Chair Gary Gensler, the launch data depends entirely on the applicants. In an interview with CNBC’s Squawk Box, Gensler noted that some of the issuers have yet to make the necessary changes to the submitted files.

For instance, the SEC approved the 19-b forms. However, there has been a delay in signing the S-1 forms. If approved and signed, then the Ethereum spot ETF can begin trading live. In addition,  Bloomberg analyst, Eric Balchunas opined that the trading of the ETFs could begin between the last week of June and July 4. 

Eric Balchunas’ post about Ethereum spot ETFs (Source: X)

Now, let’s look at some of the biggest Ethereum ETFs. In the following segments, you will learn everything you need to know about Bitwise (BITW), VanEck (EFUT), Valkyrie (BTF), and ProShares (EETH).

Bitwise (BITW)

As of June 7th, the Assets Under Management (AUM) of the BITW is $478 million. Its 24-hour trading was $1.16 million at the time of writing. On a Year-To-Date (YTD) basis, the Bitwise Ethereum fund has returned an impressive 58.7%.

Also, the price was $37.55, representing a 90-day decline and a 20% hike within the last month. In terms of its expense ratio, Bitwise offers 1.50% while its custodian is Coinbase Custody Trust Company, LLC.

Valkyrie (BTF)

The market price of BTF as of this writing was $21.01. However, the AUM was lower than that of Bitwise at $25.93 million. It also has a market capitalization of $54.44 million. On a Year-To-Date (YTD) basis, BTF’s price has increased by 49.89% while decreasing by 2.50% in the last five days.

However, Coinbase is not the custodian of the Valkyrie Ethereum futures ETF. But it is administrated by US Bancorp Fund Services LLC. In addition, the expense ratio of BTF is 1.24%.

VanEck (EFUT)

For VanEck’s EFUT, the AUM at the time of writing was $7.84 million, with a market cap of $29.36 million. Its Net Asset Value (NAV) was $28.63. In 2024, the price of the assets has increased by 42.49%. 

Its 12-month high was $31.55 in March 2024 while its lowest value was $15.28 in December 2023. Meanwhile, EFUT’s expense ratio is 0.66% much lower than Valkyrie and Bitwise.

ProShares (EETH)

As of this writing, ProShares AUM was $6.43 million. However, its market cap was $95.17 million, indicating that it was higher than the other three. Launched in 2023, EETH has produced a yearly increase of 39.73% as the NAV trades at $77.58.

But like others, the value of the assets has decreased in the last five days. In terms of the expense ratio, Coinfeeds found that it was 0.95%.

EETH Price Performance (Source: ProShares)

However, beyond the Ethereum futures ETFs, here is a list of spot ETFs that could start trading as early as the last week of June.

Approved Spot Ethereum ETFs

  • Ark Invest/ 21Shares
  • VanEck
  • Grayscale
  • BlackRock
  • Hashdex
  • Invesco/Galaxy
  • Fidelity

The Bottom Line

In conclusion, it is important to know that Ethereum ETFs are not the same as ETH. Unlike cryptocurrencies, this financial product is highly regulated and is under the radar of the U.S. SEC.

Furthermore, the prices of each ETF largely depend on the movement of ETH — especially for spot products. Therefore, you should realize that the instruments could be volatile, and price swings could be high at different points. 

Additional Resources

Additionally, if you intend to trade the Ethereum ETFs, you can visit any platform that facilitates the trading of the assets. For more information, you can visit the official information websites of Valkyrie, Bitwise, VanEck, and ProShares.

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