Cryptocurrency Ether ETFs: Will October be a Pivotal Month? – October 4, 2023

The year 2023 has been great for cryptocurrencies. Valkyrie Bitcoin Miners ETF (WGMI – Free Report) , which provides exposure to the bitcoin mining industry, has gained about 120% so far, becoming the top-performing ETF of the first nine months of 2023.

And now, as many as nine ether ETFs hit the market this week from firms like firms ProShares, VanEck, Bitwise, Valkyrie, Kelly, and Volshares. Ether is already the second-most popular crypto currency, right after bitcoin.

Grayscale also announced that it has filed an application to convert its Ethereum Trust into an ETF. Below, we highlight newly-launched ether futures products and their net expense ratios (ER), per CNBC.

BitWise Ethereum Strategy ETF (AETH) – ER 0.85%

Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP) – ER 0.85%

ProShares Ether Strategy ETF (EETH) – ER 0.95%

ProShares Bitcoin & Ether Equal Weight Strategy ETF (BETE) – ER 0.95%

Bitcoin & Ether Market Cap Weight Strategy ETF (BETH) — ER 0.95%

VanEck Ethereum Strategy ETF (EFUT) – ER 0.66%

What is the Prospect of Ethereum?

Bitwise CEO, Hunter Horsley, highlighted Ethereum’s rapid expansion, stating, “With its billions in revenue and millions of users, Ethereum is now the dominant operating system in the crypto world. Its growth is evident in its diverse app ecosystem and developer community.”

Bitwise CEO went on to highlight that renowned companies like Nike, Starbucks, Adidas, Pepsi, PayPal, and JPMorgan have adopted Ethereum-based applications. In recent times, Ethereum-based apps have hit noticeable milestones.

For instance, stablecoins, which serve as an alternative to traditional payment systems like card networks and ACH, processed over $1 trillion in transactions in just the first quarter of 2023. This is a great jump from being virtually non-existent in 2019 to an enormous $125 billion market today.

Furthermore, the capital invested in decentralized finance (DeFi) applications on Ethereum has surged, growing 60 times since 2019 and amounting to $40 billion currently, per Bitwise Asset Management.

Investors should also note that Ethereum does not have a high correlation with the S&P 500, the Nasdaq-100 and the Russell 2000 as the correlation coefficient remains 0.28X, 0.33X and 0.24X, respectively.

Bottom Line

We believe the timing of the launches of these ETFs is perfect as markets are in favor of cryptocurrency investing now. One of the most significant developments seen recently for the Bitcoin ecosystem was the legal victory in the U.S. Court of Appeals for the D.C. Circuit, involving Grayscale and the U.S. Securities and Exchange Commission (read: Inside the Volley of Good News in Crypto Realm: ETFs in Focus).

In the past few weeks, we have seen the filing of spot ETF applications by renowned asset managers, which fueled a growing interest in cryptocurrencies from institutional and corporate clients. Robinhood Markets has added wallet support for Bitcoin (BTC) and Dogecoin (DOGE).

Halving events, which occur about every four years, lower the mining rewards by half. The resulting shortage of newly mined BTC has historically played a crucial role in driving price rallies. As the halving event looms in 2024, traders are tightening their belts for a new cycle. So, there is a high chance of an upward momentum for Bitcoin and other cryptocurrencies.

Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.

Get it free >>