Key Points

• The iShares Ethereum Trust (ETHA) has attracted more assets than any other Ethereum ETF, with 42% of asset inflows in just the past month.

• BlackRock's backing provides institutional credibility and virtually unlimited financial resources behind the fund.

• Buying Ethereum through an ETF eliminates the need for crypto wallets, special exchanges, and fractional coin calculations.

• 10 stocks we like better than iShares Ethereum Trust - iShares Ethereum Trust ETF ›

Exchange-traded funds (ETFs) based on the real-time price of Ethereum (CRYPTO: ETH) have been around for a year now. Since the funds were approved and launched in July 2024, Ethereum has gained 7% while the S&P 500 (SNPINDEX: ^GSPC) rose 18%. The leading ETFs have done a great job of tracking this performance precisely, even if the cryptocurrency has been lagging behind stocks recently.

But one ETF stands apart from the rest in many ways. If you're planning to enter the Ethereum market via an ETF, the iShares Ethereum Trust (NASDAQ: ETHA) should be at the top of your list. Apart from having the most assets under management (AUM) in its category, the iShares ETF also comes with low fees and a proven fund family.

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So if you have $500 to spend on a crypto investment today, here's why you should consider the iShares Ethereum Trust.

Is Ethereum a good investment?

Ethereum is often more volatile than the larger Bitcoin (CRYPTO: BTC) cryptocurrency. For instance, the two crypto giants have both posted approximately 1,200% gains in the last five years, but Ethereum's path to this peak had many more peaks and valleys along the way. The S&P 500 is basically flatlining next to both, even in the midst of the generative artificial intelligence boom:

Ethereum Price data by YCharts

Now, Ethereum serves a very different purpose than Bitcoin. Instead of a fundamental wealth-holding tool, Ethereum's smart contracts help app developers manage financial tools and trends in a global blockchain ledger. So Ethereum's value doesn't spring from a scarce supply, but from real-world usage of the resulting programs.

That makes Ethereum a promising investment if you feel like the financial world could use a whole new set of basic tools. Ethereum-based apps can track ownership of physical assets, execute financial transactions automatically, or manage your digital wallet securely. The Ethereum ledger is readable anytime, from anywhere.

At the same time, its encryption effectively makes all of this transaction data immune to hacking and fraud attacks. On this platform, developers can build a wide variety of financial apps, mobile games, and so on.

So if you see a market for this sort of thing in the long run, Ethereum has led the blockchain-based app development space for years. It's the industry standard -- for good reason. And that should make Ethereum a solid investment over the years, as decentralized app development continues to gain traction.

Image source: Getty Images.

Why buy via an Ethereum ETF?

Buying Ethereum directly often means setting up a new account with a different type of brokerage -- one that can handle cryptocurrency trades rather than stock transactions. You also need to get comfortable with a different type of transaction, where you're usually trading fractions of a digital coin rather than batches of full shares of a stock. Prices are always changing, and you have to figure out where to store your new Ethereum coins.

ETFs make the whole process much easier, assuming you already have a stock-trading brokerage account. These funds act just like stocks, with shares usually priced in a comfortable range. A few iShares Ethereum Trust shares at $27 apiece can be more comfortable than a single Ethereum coin at $3,640.

What makes the iShares ETF special?

As mentioned, the iShares fund is more popular and therefore more liquid than other Ethereum-based ETFs. This makes trading safer and easier, with more stable share prices and quicker transactions.

It's part of the world-famous iShares fund family, next to the even more popular iShares Bitcoin ETF (NASDAQ: IBIT) and the massive iShares Core S&P 500 ETF (NYSEMKT: IVV). Financial services giant BlackRock runs the show, giving investors the peace of mind that comes with essentially bottomless financial backing.

And like most of its iShares cousins, this one comes with a low fee ratio. At 0.25% per year, it's not exactly the cheapest Ethereum ETF to own, but it comes close to the lowest-cost Grayscale Ethereum Mini Trust (NYSEMKT: ETH) at 0.15%. The BlackRock backing and world-class liquidity can make up for this small gap, and some Ethereum ETFs come with fee ratios as high as 2.5%.

The iShares Ethereum Trust is only pulling away from the competition, too. With 42% of AUM inflows over the last month, this fund added more AUM than any other Ethereum ETF has done year to date.

You should consider the iShares Ethereum Trust before any other fund in this category. It's a great place to put your next $500 (about 18 shares) of investable cash to work. Market makers broadly agree, judging by the dominant inflows of more funding.

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Anders Bylund has positions in Bitcoin, Ethereum, iShares Bitcoin Trust, and iShares Ethereum Trust - iShares Ethereum Trust ETF. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

The price of Bitcoin (CRYPTO: BTC) is back over $100,000. But according to many experts, the run is far from over. Ark Invest CEO Cathie Wood recently reaffirmed her 2030 price target of $700,000. Long term, she believes a single Bitcoin could eventually be worth several million dollars.

Every investor should have at least a small exposure to Bitcoin, even if it's just $100. That gives you enough cash to easily buy into the two Bitcoin exchange-traded funds (ETFs) below. Just be careful: The two ETFs below provide very different exposures to Bitcoin and crypto in general.

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This is the largest Bitcoin ETF in the world

The largest Bitcoin ETF right now -- at least measured by the amount of money that has been invested into it -- is the iShares Bitcoin Trust ETF (NASDAQ: IBIT). As of last quarter, the ETF's holdings were worth roughly $70 billion -- more than triple the asset value of the next-largest Bitcoin ETF. Scale allows this ETF to charge lower expense ratios than the competition. The total management fee right now is a reasonable 0.25%. Many competing ETFs charge significantly higher fees.

The best thing about this Bitcoin ETF is that it invests solely in Bitcoin. When you buy Bitcoin directly, you need to deal with a long list of complexities. Taxes can be difficult to track manually, and security issues are commonplace, with many investors falling victim to scams or phishing attempts that drain their accounts with little to no recourse available. By investing in the iShares Bitcoin Trust ETF, all of these complexities become streamlined, just as they would by purchasing any other ETF. As the ETF's prospectus describes, packaging a Bitcoin investment vehicle as a simple ETF helps "remove the operational, tax, and custody complexities of holding bitcoin directly."

Perhaps the best news is that buying a Bitcoin ETF lets you automate your investments. So you can buy $100 today, but you can also tell your brokerage to withdraw another $100 each month, with the proceeds automatically invested in more Bitcoin. This helps you dollar-cost average your Bitcoin investment -- a huge advantage for such a volatile asset.

As you'd expect, more than 99.9% of the trust's holdings are invested directly into Bitcoin, with a tiny amount allocated to cash, mostly to meet daily liquidity needs. With such a low expense ratio, this is one of the fastest and most efficient ways to get Bitcoin exposure. But if you want to invest in more than just Bitcoin, check out the new ETF below.

Image source: Getty Images.

This crypto ETF invests in more than just Bitcoin

Launched in 2023, the Bitcoin & Ether Market Cap Weight ETF (NYSEMKT: BETH) invests primarily in Bitcoin. But as the ETF's name suggests, it also allocates some of your funds into Ethereum.

Ethereum is the second-largest crypto asset in the world today. And while it does have distinct differences when compared to Bitcoin, a very simplistic explanation is that it is essentially "programmable" Bitcoin. That is, it is a decentralized asset that allows for other things to be built on top of it, with the Ethereum virtual machine executing commands in a way that can't be controlled by any one individual. By investing in Ethereum, you're essentially betting that the wide crypto universe will also prevail, not just Bitcoin.

As of last quarter, this ETF's portfolio had 88% exposure to Bitcoin, with the remainder invested in Ethereum. Importantly, exposure is gained through futures contracts, not directly through Bitcoin holdings. This approach adds some correlation risk.

As you can imagine, this increased diversification comes with added costs. The expense ratio for this ETF is around 0.95%. For most investors, the cheaper iShares Bitcoin Trust ETF is a suitable option. But if you'd like to make sure you bet both on Bitcoin and crypto in general, this is a great all-in-one ETF to accomplish that. And as with any other ETF, you can set up automated investments to make sure you're putting more money to work on a regular basis. This way, you don't need much to get started.

Whether you go with the cheaper and arguably more effective IBIT ETF, or get fancier with the BETH ETF, both give your portfolio instant exposure to crypto markets with as little as $100.

Should you invest $1,000 in Bitcoin right now?

Before you buy stock in Bitcoin, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bitcoin wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $658,297!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,386!*

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Ryan Vanzo has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

Shares of the Bitcoin (CRYPTO: BTC)-focused exchange traded fund iShares Bitcoin Trust ETF (NASDAQ: IBIT) rallied 14.3% in April, according to data from S&P Global Market Intelligence .

The IBIT is the most-traded and liquid Bitcoin ETF, and is run by Blackrock (NYSE: BLK), the largest asset manager in the world. IBIT is essentially a way to buy Bitcoin through traditional custodial entities, and its value tends to mirror the price of Bitcoin exactly.

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Image source: Getty Images.

Bitcoin has often been touted as a store of value and hedge against geopolitical disaster or runaway inflation, similar to gold; however, Bitcoin hasn't really traded that way in the past. Typically, Bitcoin's performance has mirrored that of speculative technology stocks during past downturns.

However, the unique dynamics following April 2 "Liberation Day" tariffs led Bitcoin to actually display some hints of differentiated performance against tech stocks -- although like tech stocks, it also recovered as trade war fears ebbed toward the end of the month.

Is Bitcoin finally becoming a store of value?

Up until April 2, Bitcoin was having a pretty terrible year, performing relatively in line with the Nasdaq Composite index in anticipation of the April 2 tariff announcement.

Interestingly, following the April 2 tariff announcements, Bitcoin fell, but not as much as tech stocks did. Then from roughly April 8 to April 21, Bitcoin actually appreciated, even though tech stocks took another leg down, with Bitcoin actually mirroring the performance of gold during that time:

IBIT data by YCharts

After April 2, a few unusual things happened. Long-term bond yields went up even as the value of the dollar declined. Usually, when U.S. government bond yields rise, the dollar strengthens. But after the tariff announcement, bonds went up but the dollar declined. This is usually a phenomenon of emerging markets, and signaled perhaps international investors selling U.S. assets, as the U.S. became seen as a source of risk, which is rare.

With U.S. Treasuries perhaps not regarded as the safe haven they were and the dollar's supremacy in question, it's perhaps not surprising that Bitcoin, regarded by some as an alternative store of value, rallied.

What is interesting is that on April 22, after Treasury Secretary Scott Bessent said that there will probably be a "de-escalation" with China, stocks experienced a big relief rally. The price of gold, which had appreciated all year, declined slightly on the lowering of risk. However, Bitcoin actually rallied, in line with tech stocks.

So, it appears Bitcoin had the best of both worlds in April: It acted somewhat as a hedge against a weak dollar and U.S. financial instability, but also as a "risk-on" technology play when trends reversed.

Was April the start of a new chapter for Bitcoin?

While the price action in Bitcoin was nice to see in April, it's unlikely Bitcoin can act both as a "risk-off" hedge against global economic disaster but then also display the "risk-on" characteristics of tech stocks. Assets should really display one characteristic or the other. But Bitcoin is still a very young asset, so investors may still be figuring out its investment characteristics.

It should also be noted that when stepping back to the beginning of the year, Bitcoin has still mostly trended along with tech stocks, and has underperformed gold by a large degree. Gold, of note, has traditionally been hedge against global currency crises and runaway inflation.

IBIT data by YCharts

Therefore, April was a definitely interesting month for Bitcoin, in that it began to deviate somewhat from tech stocks in performance, and had inklings of being regarded as a "safe haven" against geopolitical turmoil. But as Bitcoin's underperformance relative to gold since the beginning of the year shows, Bitcoin is perhaps not quite at that level, yet. As of now, Bitcoin is acting somewhat in between the dichotomous assets of tech stocks and gold.

Should you invest $1,000 in iShares Bitcoin Trust right now?

Before you buy stock in iShares Bitcoin Trust, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and iShares Bitcoin Trust wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $623,685!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $701,781!*

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See the 10 stocks »

*Stock Advisor returns as of May 5, 2025

Billy Duberstein and/or his clients have positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.