ETF Talk: Crypto on the Horizon

“O, brave new world, that has such people in it.”

–Shakespeare, “The Tempest”

We are certainly entering a brave new world this year with the Trump administration — in more ways than one. But here I am not talking about the people of this brave new world; it’s all about the “new” world of cryptocurrencies (which, of course, you can read all about in my latest trading service, Crypto & Commodities Trader).

Where former President Biden and Democrats were wary of cryptocurrencies, President Trump and his administration openly support digital assets, with crypto-friendly nominations in important government positions that have delighted crypto enthusiasts and seem to be making good on his campaign promise to make the United States the “crypto capital of the planet.”

The biggest crypto name is, of course, Bitcoin, but today, our focus is on the world’s second-largest crypto by market capitalization, Ethereum. There are currently eight spot Ethereum ETFs that investors can use to gain exposure to this crypto, including today’s featured exchange-traded fund (ETF), iShares Ethereum Trust (ETHA).

If you follow crypto at all, you probably already know that investors no longer need a special crypto account or “wallet” to score profits in the dynamic and expanding world of cryptocurrencies. Thanks to ETFs such as ETHA, you can now get exposure to crypto in more familiar trading territory.

Founded by BlackRock on June 24, 2024, this ETF is just getting warmed up. It enables investors to get exposure to Ethereum’s native token, ether, without the barriers and burdens of holding the tokens directly. Not surprisingly, the fund seeks to reflect the performance of the price of ether.

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And with the fund attracting institutional capital, investors are gaining confidence. ETHA has outperformed its competitors, pulling a majority of recent inflows. The fund currently has net assets of around $3.52 billion. It has an expense ratio of 0.25% but BlackRock has stated it will reduce its fee to 0.12% until July 23, 2025, or the first $2.5 billion in fund assets, whichever comes first.

Chart courtesy of Stockcharts.com.

As the chart above shows, ETHA is no different from other cryptos in terms of volatility. But given the Trump administration’s embrace of cryptos, the odds are in favor of the ETF moving in an upward trend going forward. And though the Securities and Exchange Commission recently postponed its decision regarding options trading for the fund, investors’ hopes remain high that they will approve in the spring.

If this crypto “byte” has whetted your appetite to learn more about cryptocurrencies and you want the most up-to-date news on trading in the crypto world, I invite you subscribe to my Crypto & Commodities Trader, where I provide the latest rational takes on investing in digital assets.

However, given the volatile nature of cryptocurrencies, investors should always do their due diligence before adding any stock, fund or ETF to their portfolio.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Forecasts & Strategies, Tactical Trader, TNT Trader, Five Star Trader, Bullseye Stock Trader, and The Deep Woods. His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.