Best Ethereum ETFs in Canada

Best Ethereum ETFs in Canada

Crypto Exchange Traded Funds (ETFs) are ETFs that track the prices of cryptocurrencies. Canada happens to be one of the first countries to approve crypto ETFs such as Bitcoin ETFs and Ethereum ETFs.

Any Ethereum ETF approved in Canada is indexed to the value of the cryptocurrency, Ethereum. Ethereum ETFs which are traded on the Toronto Stock Exchange should not be confused with the digital asset Ethereum, which is traded on cryptocurrency exchanges.

There are now a number of these crypto ETFs in the country, but if you wish to invest in them or you are thinking of how to buy an Ethereum ETF in Canada, you may be wondering which are the best. This article highlights the best Canadian Ethereum ETFs to help you narrow down your choices.

Table of Contents

The Best Ethereum ETFs in Canada 2022

1. Purpose Ether ETF

  • Ticker: ETHH, ETHH,B, ETHH.U 
  • Management expense ratio (MER): MAX 1.5%
  • Listing Currency: CAD/USD
  • Assets Under Management (AUM): approx. CAD $396.7M
  • Management Fees:00%
  • Eligible accounts: TFSA/RRSP

Purpose Ethereum ETF is one of the first cryptocurrency ETFs to be approved in Canada, and the world’s first physically settled Ethereum ETF. Owned by Purpose Investments, the ETF went live on 16 April, 2021. There are nearly 96,541 ETH in holdings and it trades on Toronto Stock Exchange in three variants, namely ETHH (CAD), ETHH.B (CAD) and ETHH (USD).

Information on its performance and returns will not be available until April 2022 when the ETF clocks one year. The precise MER is unknown at the moment, but is capped at 1.5%.

2. CI Galaxy Ethereum ETF 

  • Ticker: ETHX
  • Management expense ratio (MER): 0.95%
  • Listing Currency: CAD/USD
  • Asset Under Management (AUM): approx. CAD $1.11 B
  • Fees: 0.4%
  • Eligible accounts: RRSP, RRIF, RDSP, DPSP, RESP, TFSA

This is an even bigger Ethereum ETF than Purpose. With about approx. CAD $1.11 billion in assets, this ETF also prides itself for having the lowest fees of any Ethereum ETF in Canada at 0.4%. The MER is also lower at 0.95% cap.

Founded in April 2021 by CI Investments in partnership with its current portfolio manager, Galaxy Digital Capital Management LP, it is also listed on TSX and offers two variants, ETHX.B (CAD) and ETHX.U (USD).

3. 3iQ CoinShares Ether ETF

  • Ticker: ETHQ
  • Management expense ratio (MER): MAX 1.25%
  • Listing Currency: CAD/USD
  • Asset Under Management (AUM): approx. CAD $292.59M
  • Management Fees: 1.00%
  • Eligible accounts: RRSP, RRIF, RDSP, DPSP, RESP, TFSA

The 3iQ CoinShares Ether ETF is the youngest of all the Canadian Ethereum ETFs as it was the last to be approved on April 19, 2021. The ETF is listed on the Toronto Stock Exchange too, and investors can buy the CAD or USD version, ETHQ and ETHQ.U respectively.

Full information for this ETF is not yet available until after one year of its listing on TSX, just like the others. 

4. Evolve Ether ETF 

  • Ticker: ETHR
  • Management expense ratio (MER): Not provided
  • Listing Currency: CAD/USD
  • Asset Under Management (AUM): approx. CAD $100.44M
  • Currencies: CAD/USD
  • Management Fees: 0.75%
  • Eligible accounts: TFSA and RRSP

Last and also the least by assets under management is Evolve Ethereum ETF. It follows the CME CF Ether-Dollar Reference Rate benchmark index and is the only ETF that can also be traded using options on the Montreal Exchange.

Though it launched at about the same time as CI Galaxy Ethereum ETF and Purpose Ether ETF, it has much less assets under management. It also has a lower management fee than CI Galaxy and Purpose Ethereum ETFs. Evolve Ethereum ETF trades on Toronto Stock Exchange as ETHR (CAD) and ETHR.U (USD).

*All figures as of January 12, 2022

What is an Ethereum ETF ?

An Ethereum ETF is an example of a cryptocurrency ETF. It tracks the price of only Ethereum, unlike a traditional ETF which tracks the prices of several assets such as bonds and stocks. Ethereum ETFs are traded daily on stock exchanges and their prices fluctuate in line with the price of Ethereum.

An Ethereum ETF makes it possible for investors with very little or no knowledge of cryptocurrency to buy and trade ETF and also takes away the responsibility of holding and managing the digital asset.

What is the difference between Ethereum and Ethereum ETFs ?

Although Ethereum ETFs track the price of the cryptocurrency Ethereum, there are significant differences between the two. Investing in an Ethereum ETF does not require knowledge of cryptocurrency, neither does the investor hold or manage the ETF.

Investing in the Ethereum cryptocurrency on the other hand requires some knowledge of how the technology works, including how to send and receive cryptocurrencies etc. You will also need to own and manage a wallet as you will be fully in charge of your investment.

Ether ETFs Pros & Cons

Pros: The Good Stuff

Logo An easy way to invest in Ethereum without having to manage a wallet

LogoInvestors don’t need crypto knowledge

Logo Issued by regulated companies, thus lower risk than cryptocurrency

Logo Can be traded and held using traditional brokerage accounts

Logo Investors can use eligible government regulated tax plans such as TFSA and RRSP

Cons: The Not So Good Stuff

Logo Gives the fund absolute control over the performance of the investment

Logo Investors cannot readily switch between assets as with traditional crypto

Logo Management fees are relatively high

How To Buy Ethereum ETFs in Canada

There are platforms for buying Ethereum ETFs in Canada. The following are some of the leading ones to use:

Questrade

Questrade is a brokerage that offers clients full access to Ethereum ETFs. Both registered and non-registered accounts including RRSP, TFSA, RESP, Spousal RRSP and Margin accounts are supported.

Investors can buy ETFs at zero fees on Questrade, but are charged a commission between $4.95 and $9.95 for selling ETFs or trading stocks.

Wealthsimple Trade

This is a trading app from Canada’s most popular robo-advisor, Wealthsimple. It is the first commission-free trading app in Canada and allows investors to buy and sell any of the above-mentioned Ethereum ETFs at absolutely no charge. 

The app is particularly friendly towards Canadian investors as trading CAD denominated stocks is also free. Only those trading USD denominated stocks will pay a currency conversion fee of between 1.5 to 2%. 

Bank Brokerage Accounts

A bank brokerage account is a type of investment account offered by banks or investment firms that allows you to buy and sell different assets including ETFs. In Canada, you can use this account to buy an Ethereum ETF. You can also sell your Ethereum ETF anytime you want without paying any fees. 

How to Buy Ethereum in Canada

Ethereum ETFs are quite secure and all, but if you prefer the more adventurous crypto market itself, you may wish to buy Ethereum directly using the following:

Wealthsimple Crypto

Yes, Wealthsimple also sells Ethereum directly. While there are no buy or sell fees, the app charges a fee of 1.5 to 2% as a spread. There are at least 29 cryptocurrencies supported.  

Although it does not have CIPF/CIDC insurance, the funds are held by Gemini, a U.S. based regulated custodian with military grade security. Funding is only through electronic transfer, but with its rapid development, more options may be available soon.

Bitbuy 

Bitbuy is one of the leading cryptocurrency exchanges on which Canadians can buy Ethereum. The fees are much lower than that of Wealthsimple Crypto. Trading fees range from 0.1 to 0.2% in addition to deposit and withdrawal fees, but all the fees put together may not be upto what Wealthsimple Crypto charges. 

Bitbuy stores 95% of customer funds in cold storage and deposits can be made using Interac E-Transfer and bank wire. 

Check out the Best Ethereum Exchanges and the Best Ethereum Wallets for 2022.

What are Bitcoin ETFs?

Bitcoin ETFs are ETFs that track the price of Bitcoin, the biggest cryptocurrency in the world. Like Ethereum ETFs, investors can conveniently buy into the Bitcoin ETFs without having to face the rigors of buying, holding and trading Bitcoin itself. They are also issued by regulated companies and so more reliable from a risk standpoint. 

The Bottom Line

Ethereum ETFs provide an easy investment option to directly buying Ethereum. If you are not into the complicated world of crypto, it may be helpful to invest in an ETF if you want a slice of the crypto cake. You wouldn’t have to worry much as you don’t have to manage the investment yourself. However, this takes away the freedom of freely using Ethereum, so you need to weigh that before going into it.

Frequently Asked Questions

Yes, as a matter of fact there are many crypto ETFs in Canada. The Ethereum ETFs listed in this article are in this category in addition to the many Bitcoin ETFs in Canada. All of them track the prices of their respective cryptocurrencies, so if you wish to enjoy the gains of cryptocurrencies without buying them directly then the ETFs will help. Also, they are all regulated by the government, so you can be sure they are safe for investing.

This depends on what you want. If you want to key into the volatility and potential price gains of Ethereum without necessarily holding any, an ETF is better. However if you want to be in on the action and own and control your own Ethereum, buying Ethreum directly will be a better choice. An ETF does not require much work on your part but you don’t have full control of your investment, unlike when you hold Ethereum directly.

Again, this depends on you. Most people would rather go for an ETF that will charge them less fees. In that regard, the CI Galaxy Ethereum ETF is on top of the list. Other than price, they all have very similar characteristics and features, so any of them should serve the purpose of buying Ethereum ETFs well. You may also decide to use one or the other based on the user interface and ease of use, the choice is yours.

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