Cryptocurrency bulls have several new exchange-traded funds to choose from.
On Tuesday, October 3, asset manager ProShares launched the first fund correlated to the price performance of Ether. The ProShares Ether Strategy ETF (“EETH”) targets the price performance of the world’s second-largest cryptocurrency, which is currently trading at around the $1640 mark.
Much like the cryptocurrencies they track, this ether ETF is seen as the up-and-coming sibling of its elder Bitcoin fund – the ProShares Bitcoin Strategy ETF (“BITO”).
ProShares Chief Executive Michael Sapir said his firm has enjoyed success with BITO and has “seen substantial demand from investors for access to the performance of cryptocurrencies through ETFs.”
Some investors are ardent Bitcoiners or ‘Eth Maxis,’ yet those in the middle can mix and match their favorite crypto flavors.
ProShares floated two funds that deliver a blended return of Bitcoin and Ether. The ProShares Bitcoin & Ether Equal Weight Strategy ETF (BETE) holds a steady 50/50 weighting on a monthly basis, while The ProShares Bitcoin & Ether Market Cap Weight Strategy ETF (“BETH”) rebalances its allocation between the two based on their current market capitalization.
There is a strong appetite for crypto assets, yet some investors fear the associated custody risks of trading on crypto exchanges, but they will find value in ETTH, Sapir said. The instability is best epitomized by last year’s sudden implosion of major exchange FTX and the controversies surrounding its disgraced founder, Sam Bankman-Fried, whose ongoing trial has again put the spotlight on cryptocurrency regulation.
Industry players have been caught in the crosshairs with allegations of violating securities laws, with some of the biggest exchanges, including Binance and Coinbase, under fire from regulators. Amidst this intensifying scrutiny, finance’s heavyweights are knocking on the door. In June, BlackRock, the world’s biggest asset manager, filed with the Securities and Exchange Commission SEC) to launch a bitcoin spot price ETF. In recent days, the SEC again delayed making a decision on BlackRock’s proposal.
Investors are watching closely as this regulatory showdown continues, and the stakes couldn’t be higher for the future of cryptocurrency.
Crypto Launch Party
These three ProShares ETFs rocked up to an already pumping party on Wall Street as a string of new crypto-based ETFs make their debuts on public markets. Also on Tuesday, The VanEck Ethereum Strategy ETF (“EFUT”) began trading on the Cboe Exchange, while the Bitwise Ethereum Strategy ETF (“AETH”) and the Bitwise Bitcoin and Ether Equal Weight Strategy ETF (“BTOP”) floated on the NYSE.
The world’s two leading cryptocurrencies have recovered a little ground in recent weeks after a sharp sell-off hit their valuations in mid-August. Bitcoin is up 6% over the past month, while Ether has nudged up just half a percentage point. Year-to-date figures show a more dramatic growth trajectory overall, with Bitcoin appreciating roughly 65% across 2023, and Ether up 37%.
EETH is an actively managed ETF and comes with steeper management fees than most themed tech-focused funds, with a gross expense ratio of 1.33%.