In a significant development for the world of digital assets, investment firms ProShares, VanEck, and Bitwise have recently unveiled ETFs linked to ether, the second-largest cryptocurrency globally, through futures contracts.
These groundbreaking ether futures ETFs have arrived on the scene two years following the debut of the first US-listed bitcoin futures ETF in October 2021. The three newly launched funds are: ProShares Ether Strategy ETF (EETH US), VanEck Ethereum Strategy ETF (EFUT US), and Bitwise Ethereum Strategy ETF (AETH US).
Each of these ETFs primarily invests in standardized front-month ether futures contracts, which are settled in cash and traded on regulated exchanges. Together, these offerings mark a significant stride towards providing mainstream investors with regulated exposure to the rapidly expanding realm of crypto assets.
Ethereum
Ether serves as the foundational token of the Ethereum network, which is the leading platform for smart contracts globally. Ethereum’s robust ecosystem empowers developers to create decentralized applications capable of revolutionizing industries, bypassing intermediaries, and enhancing transparency and efficiency in global systems.
Ether stands apart from many other cryptocurrencies because its value is directly influenced by the utilization of the Ethereum blockchain. Every time individuals use an application built on Ethereum, they are required to pay fees using ether tokens. These fees are akin to stock buybacks and dividends, furnishing a crucial reference point for valuing ether.
ProShares
The ProShares Ether Strategy ETF is listed on NYSE Arca and comes with an expense ratio of 0.95%. In addition to EETH, ProShares has introduced two ETFs designed to provide a blended return from bitcoin and ether: the ProShares Bitcoin & Ether Equal Weight Strategy ETF (BETE US), which rebalances its holdings to maintain a 50/50 split between the two cryptocurrencies on a monthly basis, and the ProShares Bitcoin & Ether Market Cap Weight Strategy ETF (BETH US), which adjusts its portfolio monthly based on the market capitalization of bitcoin and ether. Both BETE and BETH also feature an expense ratio of 0.95%.
VanEck
The VanEck Ethereum Strategy ETF, unlike its counterparts, is actively managed and structured as a C-Corp. The fund is overseen by Greg Krenzer, an experienced professional in the asset trading domain. EFUT is listed on the Cboe BZX Exchange and boasts the lowest expense ratio among its competitors at 0.66%.
Bitwise
The Bitwise Ethereum Strategy ETF is listed on NYSE Arca and carries an expense ratio of 0.85%. Bitwise has also introduced the Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP), which, similar to VanEck’s BETE, rebalances its allocation to maintain an equal split between bitcoin and ether futures on a monthly basis. BTOP also features an expense ratio of 0.85%.
