Home
News
- 1 Ethereum ETFs are getting popular among stock investors.
- 2 ETFs allow easy exposure to ETH price without managing keys.
- 3 Ethereum ETFs are likely to see inflows as crypto investing grows.
Exchange-traded funds (ETFs) tracking the price of Ethereum’s ETH token have exploded in popularity among stock market investors. The surge in interest for Ethereum ETFs reflects the ballooning appetite for mainstream and regulated exposure to the booming crypto asset class.
ETF Offer Easy Exposure to ETH Price Action
An Ethereum ETF offers investment exposure to Ethereum’s native cryptocurrency, ETH, without having to hold the asset and manage private keys directly. It trades on traditional stock exchanges just like regular stocks, allowing both retail and institutional investors easy access.
The first Ethereum ETFs were launched in 2021 but garnered limited interest initially. However, trading volumes will skyrocket in 2022, along with the rising crypto market. In particular, the ETF hitting viral popularity is the ProShares ETF tracking CME Ethereum Futures under the ticker ‘ETHE.’
The crypto market saw a record $1 Billion in trading volume on May 10, 2022, amidst the crypto market’s turmoil. It hit $550 Million in volume the next day. Investors flocked to ETHE as an alternative play on Ethereum when direct crypto markets turned volatile.
Other prominent Ethereum ETFs also saw surges in activity, though smaller than ETHE. These include the VanEck Ethereum Strategy ETF (ETHX) and the Grayscale Ethereum Trust (ETHE). Both provide exposure to Ethereum through a fund structure without managing keys.
Ethereum ETFs Gain Momentum Amidst Market Shifts
The May 2022 blow-up of the Luna/Terra ecosystem further spurred interest in Ethereum as the leading smart contract platform. The crisis led investors to shift capital from smaller alt-L1s into the more established Ethereum network. The Ethereum ETFs became a prime vehicle for stock investors to ride this trend.
ProShares’ regulatory filing reveals that ETHE had over $1 Billion in assets under management in spring 2022. The ETF saw inflows of over $230 Million in just several weeks amidst the volatility.
The popularity of Ethereum ETFs underscores the expanding mainstream awareness of crypto as an investable asset class. It mirrors the rise of Bitcoin ETFs like BITO at the start of 2021. Ethereum derivatives give regulated exposure to ETH price action without the technical complication of custody keys.
Critics argue Ethereum ETFs do not offer the benefits of truly holding ETH, like accessing decentralized finance apps. But for the average stock investor, the products provide adequate exposure to be long on Ethereum prices conveniently via existing brokerage accounts.
Conclusion
As cryptocurrency investing gains broader adoption, Ethereum ETFs appear positioned for even greater interest and assets under management going forward. The leading ETHE product currently sees more liquidity than actual ETH futures markets. These regulated fund wrappers serve as an accessible on-ramp to Ethereum and crypto exposure for mainstream investors, demonstrating that digital assets can no longer be ignored and must be addressed within well-diversified investment portfolios.
Saurav Bhattacharjee is in charge of the Broadcast development team of The Coin Republic.
He has been covering the Metaverse and NFT niche for the past 2 years.
With stellar interviews on his portfolio like Nicehash, Paxful, WallstreetWolvesNFT, Bitholla, Totemfi, EOS.io etc. Saurav has spearheaded the NFT SUPERSTARS AWARD and successfully hosted the first award in 2021.
