Ether futures exchange-traded funds (ETFs) hold derivative contracts but don't trade in ether (ETH) tokens directly. This allows investors more comfortable with regulated U.S. exchanges to engage in this market. Unlike spot cryptocurrency ETFs, which, if ever approved, would hold ETH directly, ether futures ETFs hold contracts tied to the crypto token's value and have shares that trade on regulated exchanges.
A type of exchange-traded product, ether futures ETFs allow investors who don't have crypto wallets or are leery of unregulated crypto exchanges to speculate or hedge on ether's price moves. Futures are agreements to buy or sell ether at a specific price in the future, allowing the ETF to track ether’s price indirectly. Spot ether ETFs, which would hold crypto directly, have thus far been turned down by the U.S. Securities and Exchange Commission (SEC).
KEY TAKEAWAYS
Ether futures ETFs offer exposure to the price moves of the ether cryptocurrency.
These funds simulate ether's changes in price, employing futures contracts to do so.
The first nine ether futures ETFs were approved in October 2023.2
Like the cryptocurrency itself, these ETFs are highly volatile.
The benefits of ether futures ETFs include regulatory compliance, diversification, ease of access, and potentially lower operational risks.
