Ethereum is one of the most popular cryptocurrencies and is only second to Bitcoin in terms of market capitalization. As a result, it’s no surprise that there are a number of ethereum ETF’s available for you to invest in – here are our top 3.
|CI Galaxy Ethereum||Purpose Ether ETF||3iQ CoinShares Ether ETF|
|Assets Under Management||$541.1 M||$459.77 M||$430.51 M|
|Inception Date||April 16, 2021||April 16, 2021||April 19, 2021|
1. CI Galaxy Ethereum
Name: CI Galaxy Ethereum
Assets Under Management: $541.1M
Inception Date: April 16, 2021
Management Fee: 0.4%
ETHX.B is the largest Ethereum ETF in terms of assets, with over $500M managed in their fund.
With the introduction of their Bitcoin ETF in March 2021, CI Financial was one of the first companies in Canada to start offering crypto ETFs.
With this experience, the company boasts great security measures including a 100% cold storage of all cryptocurrency assets.
This reduces the risk of any cybersecurity issues that could result from assets being accessed illegally.
The ETF also boasts a 0.4% management fee, the lowest out of the main competitors.
Definition: Cold Storage
Cold storage is a way of holding cryptocurrencies (like Ethereum) offline. This reduces the likelihood that hackers would be able to gain access to your wallet. Cold storage usually involves hardware similar to a USB that can be unplugged and stored in a safe physical location.
2. Purpose Ether ETF
Name: Purpose Ether ETF
Assets Under Management: $459.77M
Inception Date: April 16, 2021
Management Fee: 1%
Released on the same day as the CI Galaxy Ethereum ETF, Purpose Investing shares many of the same attributes as their competitor.
The company also offers a Bitcoin ETF, uses cold storage, and implements robust security measures.
One of the main differences is their management fee, which is double what is charged by the CI Galaxy Ethereum ETF.
3. 3iQ CoinShares Ether ETF
Name: 3iQ CoinShares Ether ETF
Assets Under Management: $430.51M
Inception Date: April 19, 2021
Management Fee: 1%
Started just 3 days after their two main competitors, the 3iQ CoinShares Ether ETF is the smallest of the three funds highlighted here.
The ETF still boasts $430M in assets and shares a similar 1% management fee as Purpose Ether ETF.
Again, the fund uses the same security measures as their competitors, with 100% cold storage for all cryptocurrency assets
How to Invest in Ethereum ETFs
The benefit of investing in an Ethereum ETF is the ability to buy and sell through brokerage platforms.
These platforms take away the complexity of needing to set up separate accounts on cryptocurrency exchanges like Coinbase or Binance.
Those who are already investing in the stock market can easily add cryptocurrency to their portfolio through Ethereum ETFs.
In Canada, there are several great options to choose from.
Wealthsimple is my personal choice.
The biggest advantages to me are the easy-to-navigate interface and free trading of Canadian stocks and ETFs.
This means that investors can buy and sell Ethereum ETFs without commissions or fees.
Another great option is Questrade, which also offers free trading of Canadian stocks and ETFs.
While many investors prefer to trust traditional institutions like the Big 5 banks, these newer “discount brokerage” platforms are just as safe and secure as CIBC, TD, Scotiabank, BMO, and RBC.
With protection through the Canadian Investor Protection Fund (CIPF), investors should feel safe knowing that their money is insured from losses due to unforeseen circumstances like insolvency.
Investing in an Ethereum ETF vs Ethereum Directly
Ethereum ETFs were created with the goal of mirroring the underlying cryptocurrency’s performance as best as possible.
Ethereum ETFs are a great way to add cryptocurrency to your investment portfolio.
While setting up an account on a cryptocurrency exchange can be time-consuming, buying and selling Ethereum ETFs is no different than buying or selling any other stock or ETF that is listed on a stock exchange.
These ETFs have given everyday traders the ability to add cryptocurrency into their portfolio through a simple and easy-to-understand way.
ETFs also take away the complexity of storing cryptocurrencies in wallets and the associated security implications.
All of this is taken care of by the investment funds that manage the ETFs.
One of the biggest benefits of Ethereum ETFs is the ability to hold cryptocurrency in registered accounts.
While there was previously no way to add cryptocurrencies to your RRSP or TFSA accounts, the creation of these Ethereum ETFs means that Canadians can now hold cryptocurrencies in registered accounts and see tax-free growth.
On the flipside, Ethereum ETFs cannot be traded 24 hours a day.
While crypto exchanges are open all day, ETFs are subject to stock exchange hours.
This means that traders can only buy or sell during weekdays when the markets are open.
With cryptocurrencies like Ethereum still remaining a highly volatile investment, huge price swings are not uncommon.
Not being able to trade overnight or even over an entire weekend can be a meaningful disadvantage.
Traders could theoretically see price decreases on Friday evening and not be able to buy or sell their shares until the following Monday morning.
- Ability to shield profits in registered accounts
- Buy and sell within your existing brokerage platform with no additional account setup required
- Restricted by market hours
- Management fees on ETFs
Frequently Asked Questions
- Is there a Canadian Ethereum ETF?
Yes, ETHX, ETHH, and ETHQ are all Ethereum ETFs that are traded on the Toronto Stock Exchange. These stocks are all traded in Canadian dollars. There are also options to trade these ETFs in US dollars. For example, the ticker ETHX.U can be used instead of ETHX.B for those who are looking to buy and sell in USD. As cryptocurrencies such as Ethereum are denominated in USD, buying and selling in Canadian dollars will mean that the price of the ETF and the underlying Ethereum will not move perfectly together. ETFs traded in Canadian dollars will be impacted by fluctuations between USD and CAD.
- How can I get Ethereum in Canada?
If you are looking to add Ethereum into your portfolio, Ethereum ETFs are the easiest and most straightforward way. Aside from ETFs, traders can also add to their portfolio by purchasing the actual cryptocurrency assets through platforms like Coinbase.