Investors in Canada and the United States were first able to add cryptocurrencies into their investment portfolios through Bitcoin ETFs, and they can now invest in Ethereum ETFs without having to worry about cold storage or security, either. In this post, we investigate the best Ethereum ETFs in Canada, as well as the pros and cons of Ethereum ETFs when compared to investing in Ethereum directly.
Given that crypto ETFs have some cons that are worth considering, most Canadians will find it easier to buy Ethereum through a reputable crypto exchange. We recommend Kraken, chiefly because of its security, ease of use, and the fact that it has the lowest trading fees across crypto exchanges in Canada.
What Are The Best Ethereum ETFs in Canada?
#1 Evolve Ether ETF (ETHR)
Evolve ETFs is an investment firm based in Toronto that has over $2 billion in assets under management, and it allows you to invest in an Ether ETF known as the Evolve Ether ETF (ETHR).
This fund is available for trading on the Toronto Stock Exchange (TSX) under the ticker symbols ETHR for Canadian dollars and ETHR.U for U.S. dollars. These versions of the ETF are unhedged, which means they aren't protected against loss by balancing or compensating contracts or transactions.
Cost
- Management fee: 0.75%
#2 CI Galaxy Ethereum ETF (ETHX)
The CI Galaxy Ethereum ETF (ETHX) is an Ethereum ETF that was created on April 16, 2021, by a partnership created between the CI Global Asset Management and Galaxy Digital Capital Management. It trades under two ticker symbols on the Toronto Stock Exchange (TSX): ETHX.B for Canadian dollars and ETHX.U for U.S. dollars. Both of these versions are unhedged as well.
This Ethereum ETF has one of the lowest management fees across Ethereum ETFs (at 0.40%), and its Management Expense Ratio (MER) can reach up to 0.95%.
Cost
- Management fee: 0.40%
#3 Purpose Ether ETF (ETHH)
ETHH is an Ether ETF offered by Purpose Investments that was created on April 2021. It is currently traded on the Toronto Stock Exchange (TSX) using the following ticker symbols: ETHH for unhedged Canadian dollars, ETHH.B for hedged Canadian dollars, and ETHH.U for unhedged U.S. dollars.
Its management fee is around 1.00%, and its Management Expense Ratio (MER) is unknown. However, because of this, Purpose Investment has capped its MER at around 1.50%, which makes this Ethereum ETF considerably pricier than some of the alternatives available on this list.
Cost
- Management fee: 1%
#4 3iQ CoinShares Ether ETF (ETHQ)
3iQ CoinShares Ether ETF (ETHQ) is an Ether ETF created by both 3iQ, Canada's largest digital asset investment fund manager, and CoinShares, Europe's largest digital asset fund manager, way back in April 2021.
ETHQ's management fee is 1.00%, and its MER has been capped at 1.25%. This makes it stand in the middle in terms of costs, being pricier than some of the alternatives on this list while also being cheaper than others.
ETHQ is traded on the Toronto Stock Exchange (TSX) under two ticker symbols: ETHQ for Canadian dollars and ETHQ.U for U.S. dollars.
Cost
- Management fee: 1%
How Do I Buy An Ethereum ETF In Canada?
Buying Ethereum ETFs in Canada is easy, mainly because you can use a myriad of Canadian brokerage platforms in order to do so, as long as they offer stock and ETF trading. In particular, however, you could use a platform like Wealthsimple Trade and Questrade to buy Ethereum ETFs.
Wealthsimple Trade, for instance, offers commission-free trading on its platform, but keep in mind that you'll incur foreign currency exchange fees if you buy USD versions of the Ether ETFs.
Questrade also offers free ETF purchases on its platform, which is great. Fees do apply on their platform, however, so keep that in mind.
What Are The Pros And Cons Of Ethereum ETFs?
1. Ethereum ETF Pros
An ETF may be a more appealing option for investors looking to invest in Ether or Bitcoin when compared to buying crypto through a cryptocurrency exchange. This is because an Ether ETF allows you to invest in Ether directly without having to worry about private keys, and if you don't have to worry about private keys, you also don't have to worry about buying a cryptocurrency wallet.
Another advantage to Ethereum ETFs is that they're traded on exchanges that are regulated by the Canadian government. This means that the Canadian Investor Protection Fund (CIPF) might be able to cover your investment in case the brokerage firm you hold your assets in becomes insolvent, which is a stark contrast to most cryptocurrency exchanges around today.
2. Ethereum ETF Cons
One noticeable disadvantage that crypto ETFs have in general is that they're limited to the two most popular cryptocurrencies to date (Bitcoin and Ethereum). So, in case you're interested in investing in other less-known altcoins, crypto exchanges are the way to go.
Another thing to note is that crypto ETFs tend to have higher fees compared to crypto exchanges, which will eat away at your investment returns over time. Lastly, because you don't have access to the private keys of the Ether you're investing in, you can't sell the Ether tokens or use them to pay for services, for example.
Interestingly, Canada had the second-highest interest of any country in the recent Ethereum Merge, behind only Singapore.
Top Crypto Exchanges In Canada To Invest In Ether Directly
Considering the cons mentioned in the previous section, most Canadians will find it easier to just buy Ethereum directly through a crypto exchange like Bitbuy or Coinsmart instead of buying it through an ETF or through other more expensive exchanges like Newton and Shakepay. This will reduce the fees you'll need to pay by a considerable margin, and it also gives you more control over your crypto assets.
Here are our picks for the top three crypto exchanges in Canada:
Best In Canada
|
Total Fees: ~0.16% |
★★★★★ Rated 4.9/5 |
Very Secure
|
Total Fees: ~3% |
★★★★ Rated 4.4/5 |
Strong Security
|
Trading fees: 2% (High) |
★★★★ Rated 4.2/5 |
In Summary
Retail investors now have a chance to add Bitcoin and Ethereum to their portfolios using ETFs, which is great news for anyone looking to enter the world of crypto investing but don't know how to do it or doesn't want to use a cryptocurrency exchange.
However, because crypto ETFs have noticeable cons (such as limited coin support, higher fees, and lack of control over the crypto tokens you're investing in), most Canadians will find that buying Ethereum through a trustworthy crypto exchange is a much better alternative. Out of the many crypto exchange options available to Canadians, we recommend using Kraken, mainly because it's highly secure, intuitive to use, and it has the lowest trading fees across crypto exchanges in Canada.
