Difference between Bitcoin and Ethereum ETF

The world is about to encounter a new crypto revolution with the introduction of crypto exchange-traded funds (ETF). Bitcoin and Ethereum are the first on the scene with approval from the Securities and Exchange Commission (SEC) and support from the United States senators. The question becomes ‘Which one is better between the two?’.

Bitcoin (BTC) and Ethereum (ETH) have always competed as the top cryptocurrencies based on value and market capitalisation. Both have undoubtedly benefited from each other but they still have independent economies from one another. Thus, people are always comparing both coins as separate investment opportunities. 

Now, both crypto are in the limelight once again as both assets will get ETF tickers at various exchanges. Many believe that both will thrive in 2024 so the best possible action is to invest in both. If you have to choose between Bitcoin vs Ethereum ETF, then here’s what you need to know:

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What is an ETF?

Exchange-traded funds or ETFs are investment vehicles, not the assets themselves. People stake in it to give the exchange a fund pool to invest in the associated project. Therefore, Bitcoin ETF is only tracking BTC performances just as Ethereum ETF is only for ETH. Investors earn a cut of the profits based on how much they put into the pool.

With these definitions alone, many can already imagine how and why both ETFs would thrive. Bitcoin is the most widely accepted cryptocurrency with a high use rate in institutional trading. On the other hand, Ethereum is the largest platform for supporting blockchain-based projects so a majority of innovations in the digital assets economy revolve around its network. 

Both ETFs have high profitability potential not just in 2024 but for years to come. There is another way to compare BTC vs ETH ETF and that is to find out where they are offered and how accessible they are for investors. 

Bitcoin ETF exchanges 

Just as BTC started the crypto trend, it is also the first to have futures announced to the public. BlackRock was the first to offer such a pool under ProShares Bitcoin Strategy (BITO). It’s one of the largest investment platforms, so much so that it inspired the movement for Ethereum as well. 

Many other institutions followed BlackRock’s example including VanEck Bitcoin Strategy (XBTF) and Simplify Bitcoin Strategy PLUS Income (MAXI). These are all popular exchanges not to mention that Grayscale is also joining the ecosystem. The difference is that they are also moving $17 billion worth of trust which the SEC tried to stop but the exchange won the case. 

Ethereum ETF exchanges 

ProShares and VanEck also offer Ethereum ETF futures with tickers EETH and EFUT, respectively. This gives ETH an even playing field with BTC in the largest exchanges in the world. There is also BitWise Ethereum Strategy with the AETH ticker. 

Bitcoin may be the first to have an ETF but it doesn’t have that much lead against Ethereum considering that exchanges are quick to offer the same for ETH. Thus, expect both assets in every exchange offering the other. 

Bitcoin vs Ethereum ETF: Which is the better investment?

Both Bitcoin and Ethereum ETFs can be found in roughly every exchange and brokerage. They also have tickers and all are just waiting for the SEC to update their regulatory framework. With availability out of the way, the next best metric to decide between BTC vs ETH ETF is to weigh their advantages, potential liquidity, and accessibility. 

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Advantages of both ETFs

All crypto ETFs offer the same advantages to every cryptocurrency user and even welcome those who don’t want to be directly involved in the digital economy. Simply, they are investing by proxy through exchanges. They don’t need to have a wallet and manage any kind of portfolio but they earn profit because someone is managing the funds for them. 

The only question is which of the two assets has the better exclusive advantage? It’s hard to say as of 2023 because the SEC is still working on the regulatory framework for it. However, there are a few past events that will play a role in their success in 2024:

Bitcoin ETF exclusive advantages

The Bitcoin market has a large lead over Ethereum thanks to Grayscale. Before ETFs became the talk of the town, there was already the Grayscale Bitcoin Trust (GBTC) which started in 2013. That was two years ahead of Ethereum’s launch in 2015 so Bitcoin already has a large heads up. They already have $17 billion in GBTC and they are moving to convert them into spot ETF. 

Ethereum ETF exclusive advantages

Ethereum is moving up its Metaverse projects in 2024, especially among casino venues. Many brands started investing in this space in 2020 giving both Decentraland and Sandbox strong content to attract many players. This is also set to revitalise the market for non-fungible tokens (NFTs) both in the arts, collectables, and game development industries. 

Liquidity differences between the two futures

Bitcoin ETFs are expected to have better stability because BTC liquidity is currently higher than ETH. This is possible because it is older and has a broader market adoption across all industries. ETH, on the other hand, is relatively muted compared to Bitcoin mostly because people trading it are using it almost exclusively within the Ethereum ecosystem. 

Not to mention that Ethereum keeps getting major hard forks regularly. The latest one was Ethereum Shanghai on 12th March 2023 which followed the Merge on 15th September 2022. These regular massive changes make the platform a bit daunting for non-developers because it’s hard to tell which direction the network is going. 

Ease of access to the assets for investors

The best part about Ethereum’s ever-changing landscape is its constantly improving accessibility for all kinds of crypto-based projects. It leads the innovations for Web3 which aims to replace or take over the current version of the internet. 

Development in Web3 means that access to ERC20 and ERC721 channels is increasingly becoming in demand. Ethereum is the best at providing them even amongst similar networks like Solana (SOL), Cardano (ADA), and Polkadot (DOT). There are also more wallets appearing with access only to Ethereum tokens minted on it which Bitcoin can’t match. 

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Final verdict: How to choose which ETF to invest in?

Bitcoin is currently undefeated in terms of profitability. This conclusion comes from the asset’s liquidity. Bitcoin’s broad market gives it an excellent edge over Ethereum because it gives it more potential uses even for people who are not directly involved in the crypto market. 

ETFs allow investors to profit from Bitcoin and Ethereum’s growth without having to own or manage a digital asset portfolio. As it stands, the crypto market revolves around Bitcoin including ETH along with Litecoin (LTC) and Dogecoin (DOGE). 

For starters, Ethereum remains integral to the decentralised finance (DeFi) economy because it supports many projects that are a part of it. Smart contracts, oracles, and decentralised apps (dApps) are just a few of ETH’s many advantages. So much so that people often discuss if ETH can surpass BTC. 

However, ETH shares the market with SOL, ADA, and DOT. They contribute to each other’s growth but they also help Bitcoin grow which is currently the universal crypto. Therefore, if you want to invest in just one between BTC vs ETH ETFs, then place your money on Bitcoin ETF. It’s still a new market so stay tuned at Gamdom for more developments on this venture. 

Frequently asked questions (FAQ)

Here are some frequently asked questions about Bitcoin and Ethereum ETFs:

What are the differences between Bitcoin and Ethereum ETFs?

Both are investments in the futures of different currencies. The Bitcoin ETF tracks BTC’s progress while Ethereum ETF does the same for ETH. There are no fundamental differences between the two assets but you can experience varying profitability rates. One can be a better investment than the other but that all depends on the direction of the crypto market. 

Are crypto ETFs regulated?

Not yet as of 2023 but the SEC has announced that it will regulate this asset soon. The framework will be available in the first or second quarter of 2024, officially allowing exchanges to offer them to investors in the United States. This is an independent matter of regulations for crypto assets which the SEC is still not allowing exchanges to offer to US investors. 

Why invest in crypto ETFs?

Crypto assets aren’t regulated so it deters many investors from buying and selling them. However, exchanges can do so on their behalf through ETFs, allowing everyone to profit from DeFi’s rapid progress. On top of that, crypto ETFs are regulated by the SEC, protecting investors worldwide from fraudulent offers. 

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