ETHA ETF: Convenient Exposure to Ethereum’s Long-term Potential

Despite a sharp selloff in August, Ethereum (ETH-USD) continues to harbor significant long-term potential, and the iShares Ethereum Trust (ETHA) is a convenient way to gain exposure to the second-largest cryptocurrency.

I’m bullish on Ethereum based on its discounted price and its potential to become the key technology driving the decentralized digital economy of the future. I’m bullish on ETHA as the largest and most liquid way to gain secure and convenient exposure to it via ETF.

What Is the ETHA ETF’s Strategy?

According to BlackRock (BLK), the “iShares Ethereum Trust ETF seeks to reflect generally the performance of the price of ether.” 

BlackRock touts several reasons for using ETHA. ETHA provides broad access to Ethereum, the second-largest digital asset, by enabling “investors to access the Ethereum network’s native token, ether, within a traditional brokerage account.”

Secondly, “ETHA can help remove operational burdens associated with holding ether directly, as well as potentially high trading costs and tax reporting complexities.”

Additionally, BlackRock explains that “ETHA is managed by the world’s largest asset manager” and benefits from a multi-year technology collaboration with Coinbase (COIN) Prime, the leading institutional digital asset custodian.

Why Choose ETHA?

Investors can simply purchase Ethereum on their own, without the use of an ETF, so why would an investor consider buying ETHA? As BlackRock alluded to, ETHA gives investors the ability to gain exposure to Ethereum through their traditional brokerage account, without the need to set up a crypto wallet or a separate crypto account on a centralized exchange like Coinbase.

Furthermore, for individuals who aren’t experienced crypto users, buying an ETF from the world’s largest asset manager, secured by the leading digital asset custodian, likely feels safer and more user-friendly. With an ETF like ETHA, there’s no need to worry about writing down a seed phrase or remembering your private keys.

Moreover, ETHA is valuable for registered investment advisors (RIAs) and other funds that are required to invest in regulated products and cannot purchase Ethereum directly on platforms like Coinbase or on-chain, as individual investors can.

Ethereum: The Digital Oil Fueling Blockchain Innovation

Ethereum is the second-largest cryptocurrency, trailing only Bitcoin (BTC-USD), with a market cap of $295.5 billion.

Although Bitcoin has a fairly well-understood narrative at this point and is often thought of by investors as a store of value or “digital gold,” Ethereum’s value proposition is somewhat different and more complex, but still compelling. Sui Chung, CEO of CF Benchmarks, recently explained to Reuters that “If Bitcoin is digital gold, then ether is digital oil… The reason Ethereum might increase in value is that people might need it to move assets around the digital network, just as people use oil to make the real world work.”

Moreover, Ethereum is not just a cryptocurrency; it’s a robust smart contract platform and the largest proof-of-stake cryptocurrency. The smart contracts on its platform power everything from non-fungible tokens (NFTs) to trading on decentralized exchanges like Uniswap (UNI-USD) to decentralized borrowing and lending and stablecoins. 

Additionally, BlackRock, the issuer of ETHA, describes Ethereum as “a global platform for applications that run without centralized intermediaries,” while others like asset manager Van Eck characterize it as an “open-source app store.”

While other blockchains like Solana (SOL-USD) and Tron (TRX-USD) have been nipping at Ethereum’s heels this summer and gaining a narrative that they are newer, perhaps more exciting blockchains, it’s worth noting that Ethereum is still the 800-pound gorilla in the space.

In terms of market cap, Ethereum boasts the largest market cap at $295.5 billion, compared to Solana’s $68 billion and Tron’s $13 billion. Additionally, Ethereum leads in total value locked (TVL) with $47 billion, well ahead of Tron’s $8.2 billion and Solana’s $4.8 billion. (TVL is a key metric that measures the USD value of assets staked or locked on a blockchain network.)

For full disclosure, I am also bullish on all three of these assets and believe that they can all be winners over the long term. We are still very early in terms of overall cryptocurrency adoption, and as technology progresses and adoption expands, there is potential for multiple major players to emerge.

Ethereum’s Dip: A Buying Opportunity

While it has been a good year for crypto overall, Ethereum is now down 14.4% over the past 30 days, and well below where it traded heading into the launch of these ETFs. If you were interested in Ethereum before the launch of the ETFs, you now have a chance to buy it at a significantly cheaper price. 

Why ETHA Stands Out: Its Unique Costs and Benefits

With nine Ethereum ETFs all hitting the market and maintaining fairly similar strategies, there is admittedly little differentiation among them. However, with over $1 billion in net inflows, BlackRock’s offering is by far the largest and most liquid of these new ETFs. Consequently, the higher liquidity and larger volume mean that the bid/ask spreads for ETFs like ETHA will be lower, making it easier for investors to buy or sell when desired.

In terms of fees, all the new ETFs are relatively similar. Like several of the others, ETHA charges an expense ratio of 0.25%, meaning that an investor in the fund will pay $25 in fees on a $10,000 investment on an annual basis. 

Although these fees may be somewhat higher than those of broad market index funds, they are justified given the complexity of this new ETF. BlackRock needs to manage and secure the underlying Ethereum for its customers, which involves working with a custodian and handling significant operational challenges.

While several other ETFs have slightly lower fees than ETHA, generally between 0.20% and 0.25%, the difference is minor. I like the idea of investing in a fund with the blue-chip reputation of BlackRock, the world’s largest asset manager, behind it. 

Plus, ETHA currently has a fee waiver in place as these new ETFs compete for market share. Until July 23, 2025, or until the fund reaches $2.5 billion in assets under management (it is currently at $1 billion), ETHA’s fee is reduced to just 0.12%.

ETHA Is a Top Pick for Ethereum Exposure

I’m bullish on Ethereum’s potential over the long term as the world’s second-largest cryptocurrency, and one that has the potential to be a global, decentralized smart contract platform and “digital oil” fueling the digital economy. I also like the idea of initiating, or adding to, a position in Ethereum here at current levels with the price down significantly from before the ETH ETFs launched.

In this context, ETHA emerges as an attractive way to gain exposure to Ethereum due to its convenience for investors using their brokerage accounts. It stands out among other Ethereum ETFs as the largest and most liquid option. I also like that it has the backing and blue-chip reputation of BlackRock, the world’s largest asset manager, supporting it.

Additionally, with the current fee waiver in place, the 0.12% expense ratio for the time being is appealing.

Disclosure