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How to Invest in Ethereum ETFs?

11 mins
Fact Checked
by May Woods
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Where can you buy Ethereum ETFs? Even though spot Ethereum ETFs might take some time to receive approval in the U.S., many individuals are being proactive and looking for the best avenues to invest in other kinds of ETH ETFs. This guide discusses the best ways to invest in an Ethereum-backed exchange-traded fund, depending on the flavor you want to experience — spot, futures, or leveraged.

Before you proceed with investing in an ETH ETF, it is important to note that doing so still constitutes a cryptocurrency investment as it provides Ethereum market exposure. Therefore, you should be mindful of volatility and other risk factors associated with crypto investing.

Methodology

Where to buy Ethereum?

Ethereum ETFs are novel financial products. However, purchasing ETH directly is still the most straightforward option in 2024. Doing so before any ETH ETF approval could be a wise move, although it does not guarantee profit. Here are the best platforms that allow you to purchase ETH directly and even dip your toes into the ETH perpetual contract space and access passive income-generating options, all under one roof:

Relevant trading pairs
ETH/USD, ETH/USDT, ETH/BTC, and ETH/EUR
Fees
0.40%
Payment methods
Bank transfers, PayPal, Apple Pay, and more
Relevant trading pairs
ETH/USDT, ETH/DUSD, ETH/BTC, ETH/USDC, and more
Fees
0.1%
Payment methods
Crypto transfers, credit and debit cards, and third-party options like Simplex
Relevant trading pairs
ETH/USDT and ETH/USDC
Fees
0.08% (maker) | 0.1% (taker)
Payment methods
Credit/debit cards, bank transfers, PayPal, and more

How do I invest in an Ethereum ETF?

Before we discuss how to invest in an Ethereum ETF, here’s a quick rundown of the concept. An Ethereum ETF is a standard financial product, like any other exchange-traded fund, only with ETH as the underlying asset. Unlike BTC ETFs, which come in a number of different flavors, including Bitcoin futures, inverse price connections, Bitcoin options, or even companies holding BTC, Ethereum ETFs are more one-dimensional.

In 2024 in the U.S., you can invest in futures Ethereum ETFs or even an inverse Ethereum ETF product (ETH3S) provided by Gate.io. However, outside of the U.S., there are several spot exchange-traded funds or exchange-traded product picks available for investing.

Investing in futures ETH ETFs

Futures ETH ETFs are trading globally, including in the U.S.

These ETFs have fund issuers invest in expiring Ethereum futures contracts, allowing investors to speculate on the future price of ETH.

Ethereum ETF Futures
ETH ETF futures: ProShares

The process of creation and redemption, in the case of the futures ETFs, also takes the rollover costs into account — the additional overheads that need to be paid once the contracts expire.

Those looking to buy Ethereum ETF picks that have ETH futures as underlying assets can choose from options trading in the U.S., including ProShares Ether Strategy (EETH), VanEck Ethereum Strategy (EFUT), and more. 

Did you know? VanEck Ethereum Strategy ETF (EFUT) is the only Ethereum futures ETF structured as a C-Corp. This ETF invests in standardized, cash-settled ETH futures contracts traded on commodity exchanges registered with the Commodity Futures Trading Commission (CFTC), specifically on the Chicago Mercantile Exchange.

We will use ProShares Ether Strategy to demonstrate investing in an ETH ETF. Here are the steps to follow:

1: Head over to the official website, which, in this case, can be accessed by clicking this link.

2: Once there, click on “How to buy” and choose from the listed brokerages. 

List of brokers offering ProShares ETH ETF: ProShares
List of brokers offering ProShares ETH ETF: ProShares

3: For any brokerage firm you choose, you must create an account and get KYC-verified. Only then can you start trading or investing in an ETH ETF.

Purchasing ETH ETF and the commissions involved: E*Trade
Purchasing ETH ETF and the commissions involved: E*Trade

Depending on the brokerage firm you choose, you need to pay the ETF-specific trading fee. Here is the trading chart of ProShares EETH:

ProShares Ethereum ETF chart: TradingView
ProShares Ethereum ETF chart: TradingView

Investing in spot ETH ETFs

As explained in our Ethereum ETF guide, spot ETH ETFs aren’t yet available in the U.S. and may not be for some time.

However, if you reside outside of the United States, you can invest in the likes of the Purpose Ethereum ETF and other spot trading options.

Purpose ETF expense ratio: TradingView

Here are the associated steps to consider.

1: Choose the spot ETF you want to buy — ETHH, ETHX.B, ETHQ, etc.

2: Locate the brokerage firms that allow you to set up an RRSP, TFSA, or even a non-registered account to use for buying these spot ETFs.

3: You can onboard the likes of RBC direct investing, TD Direct Investing, Questrade, or Interactive Brokers to track and buy spot ETH ETFs.

Before you move ahead with any purchase, it is advisable to check the accessibility of the asset, regulatory approval, and market risks. 

Details of Purpose Ether ETF: Purpose
Details of Purpose Ether ETF: Purpose

Notably, Purpose Ethereum ETF has Coinbase as its ETF sub-custodian, helping with the creation and redemption process. 

purpose appoints coinbase
Purpose ETH ETF: Purpose

Spot Ethereum ETF prospects are brighter than ever

In recent developments, the U.S. Securities and Exchange Commission (SEC) has requested additional information regarding Ethereum ETFs, significantly increasing the likelihood of their approval. This request indicates a positive shift in the regulatory landscape, suggesting that the SEC is seriously considering the introduction of Ethereum ETFs to the market.

Renewed optimism and additional details

Bloomberg Intelligence analysts Eric Balchunas and James Seyffart have increased the likelihood of spot Ethereum ETF approval from 25% to 75%. This change follows the SEC’s request for asset managers to update their 19b-4 filings, which is essential for proposing new rule changes. This request has sparked industry optimism, signaling potential progress in the approval of a spot Ethereum ETF.

The SEC’s detailed scrutiny of 19b-4 filings, ahead of the May 23 deadline, indicates a comprehensive evaluation of market structure, liquidity, and associated risks. Despite this promising sign, it may take several weeks or months before the necessary S-1 approvals are granted, which are crucial for launching the ETFs.

Market experts believe that the SEC’s request indicates significant progress in the approval process. While the exact timeline remains uncertain, there is speculation that a verdict could be reached within the next few months, possibly by the end of the third quarter. This potential timeline aligns with the typical period the SEC takes to review and decide on such matters.

Price impact on ETH and other cryptocurrencies

Following the positive news, ETH surged 20% in under 24 hours, briefly crossing the $3800 mark. Analysts are attributing Ethereum’s price surge to the renewed optimism surrounding the potential approval of Ethereum ETFs.

They believe that the increased likelihood of approval could drive further gains in Ethereum’s price, potentially pushing it to new highs. The positive sentiment could also have a ripple effect on other cryptocurrencies, boosting their prices as well. Analysts suggest that if the approval comes through, Ethereum could see a continued upward trend, possibly reaching new all-time highs.

Already, other cryptocurrencies within the Ethereum ecosystem, such as Polygon (MATIC) and Optimism (OP), have seen notable price increases.

ETH price action on spot ETF optimism: TradingView
ETH price action on spot ETF optimism: TradingView

Also, if you are planning to make use of the positive sentiments before the spot ETFs arrive, this price chart can help you understand the key points. For now, the next big target for ETH is the $4000 mark. Once this mark is breached, you can expect fresh gains at the counter.

Yet, the current state of RSI shows that a quick correction or, rather, a pullback to $3672 is possible. That would give the RSI a breather, allowing the bulls to regather and push the prices higher.

But if you are still only looking for ETFs, keep reading!

Investing in leveraged ETH ETFs

While we have assessed some of the options above, some users will be looking to invest in Ethereum ETFs directly, say via an exchange. There are a few options where you can do so.

Unlike the Bitcoin Inverse ETFs, Ethereum has fewer leveraged ETH ETF picks. The only one that’s trading in 2024 is Gate.io’s ETH3S or the 3X Ethereum ETF. Also, it isn’t an ETF in the traditional sense but an inverse leveraged token, which stands for 3X short. 

Leveraged Ethereum ETF: Gate.io
Leveraged Ethereum ETF: Gate.io

Here are the steps to invest in a leveraged ETF.

1: Open a Gate.io account.

2: Understand how the product works. For instance, if the price of ETH corrects by $10, your ETF portfolio would correct by $30 or in the same 1:3 ratio. 

3: Fund your Gate.io account. You can choose direct crypto transfers, credit/debit cards, or even third-party services like Banxa. The funding methods might vary, depending on your geographical location.

4: Choose the order type — Limit, Market, Stop-Limit, etc, to place the leveraged traded at the best possible price. With Gate.io, you can even utilize trading bots to navigate this Ethereum ETF for you.

Trade ETH3S using bots: Gate,io
Trade ETH3S using bots: Gate,io

A good thing about the ETH3S is that the leverage is adjusted to 3:1 at the end of the trading day. Gate.io also has an ETH3L ETF or token, which reacts positively to the ETH-specific price rise, unlike the ETH3S.

etf trading
ETH3L ETF trading interface: Gate.io

Which Ethereum ETF to choose?

Besides the mentioned ETF variants, several ETH ETPs also exist. However, these ETPs are often region-specific and require you to connect with listed brokerage firms to get hold of these ETPs. 

For instance, ETC Group has recently listed the ETC Group Ethereum Staking ETP on the Germany-specific Deutsche Börse XETRA.

BeInCrypto connected with ETC Group’s Head of Product, Chanchal Samadder, to find out more. Samadder noted:

“We view this as a positive development. Staking offers investors the complete economic benefits of Ethereum and leads to improved outcomes. However, the approval of these products by the Securities and Exchange Commission (SEC) remains uncertain. 

Drawing from our experience with launching our Staked ETH product, building a staking product is significantly more complex and introduces a range of new risks. If issuers lack deep familiarity with the technical aspects of the Ethereum protocol and do not have expertise in exchange-traded products (ETPs), it could potentially harm investor outcomes.”

Chanchal Samadder, Head of Product, EIC Group: BeInCrypto

Notably, if the staking component comes to the spot ETH ETFs in the U.S., it could make investing in Ethereum ETFs more lucrative. 

Regulatory concerns regarding ETH ETF investing

Before you invest in ETH ETFs, it is advisable to track the regulatory waters associated with these products. In the U.S., the SEC tracks every move made by the issuers who have already made a request for spot ETH ETF. Fidelity and Blackrock are among the top names that have filed for an ETH ETF spot with the SEC, expecting a May approval. However, the complex structure of Ethereum, per the Howey Test standards, might delay any envisaged green light.

More about the regulatory concerns:

Those eyeing Europe-specific ETH ETF and ETP picks should note that these are governed by the Markets in Financial Instruments Directive (MiFID) and the Undertakings for Collective Investment in Transferable Securities Regulations (UCITS).

The Ontario Securities Commission (OSC) handles the regulatory approval part for products related to the Canadian mainland. It is advisable to check the regulatory approval of any ETF or ETP before investing.

The financial perks of investing in ETH ETFs

Firstly, ETH ETFs give investors exposure to Ethereum’s price in one way or another. This happens via regular TradFi firms and stock exchanges. Plus, ETH ETFs can also help generate passive income. For instance, the ProShares ETH Futures ETF offers dividends. 

Where to buy Ethereum ETF and get dividend: TradingView
Where to buy Ethereum ETF and get dividends: TradingView

Plus, Ethereum, being a proof-of-stake (PoS) crypto now, has the staking element in play. Many prospective issuers didn’t consider this aspect in the first place. BeInCrypto reached out to Lark Davis, CEO of Wealth Mastery, for further expert insight:

“Ethereum ETF products are potentially even more bullish than Bitcoin. The reason is that Ethereum does so much more than Bitcoin. For example, if you want exposure to NFTs or stablecoins or gaming, buy Ethereum. 

Lark Davis, Founder of Wealth Mastery: BeInCrypto

Therefore, in terms of timelines, the end of May 2024 might be crucial. If the ETF is denied, with the SEC citing complexity or even regulatory compliance issues, the prices might dip. This could allow buyers to enter the bull market with better positions.

Refer to our data-backed Ethereum price prediction to further understand the lows and highs we can expect should such a sentiment-driven scenario surface. 

Ethereum ETF fund flow: TradingView
Ethereum ETF fund flow: TradingView

Tracking your ETH-specific diversified portfolio

Once you have chosen an Ethereum ETF to invest in, the next step is to monitor your investment. Here are a couple of tools or platforms that can help you track your investment strategies and even assist with crypto tax considerations.

Delta App

Assets
Cryptocurrencies, ETFs, and stocks
Top features
Portfolio analysis, real-time market data, and profit/loss statements

Coinstats

Assets
Cryptocurrencies
Top features
Wallet integrations and customizable alerts

Ethereum or Ethereum ETFs: Which one should you invest in?

For those who want to steer clear of exchanges and wallets and buy Ethereum ETFs, this guide has set out a number of options and considerations. Overall, if you are looking for a long-term cryptocurrency investment, looking to Ethereum directly might make sense, especially with the Ethereum 2.0 developments in progress in 2024. The bull market is even pulling institutional investors into the mix.

Whether you invest directly in ETH or into an associated ETF product, ensure you are aware of the risks and fees involved. Never invest anything you cannot afford to lose, and don’t get caught up in FOMO. Like with an investment, when you buy Ethereum ETFs, profits are never guaranteed. Crypto is a volatile arena, whether you are directly or indirectly exposed to the asset.

Frequently asked questions

What is the 3X Ethereum ETF?

Can I buy ETF on Binance?

Can I buy ETF directly?

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Ananda Banerjee
Ananda Banerjee is a technical copy/content writer specializing in web3, crypto, Blockchain, AI, and SaaS — in a career spanning over 12 years. After completing his M.Tech in Telecommunication engineering from RCCIIT, India, Ananda was quick to pair his technical acumen with content creation in a career that saw him contributing to Towardsdatascience, Hackernoon, Dzone, Elephant Journal, Business2Community, and more. At BIC, Ananda currently contributes long-form content discussing trading,...
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