The Ethereum price has seen an increase over the past two days as investors focus on the potential approval of spot Ethereum ETFs by the Securities and Exchange Commission (SEC). The price of ETH rose to $3,112 on Tuesday, marking a 10.5% increase from last Friday. There is optimism that the SEC will approve these ETFs soon as companies continue to submit their final documents. VanEck submitted its amended filing on Monday, while Invesco filed on Tuesday morning. Bitwise and 21Shares have also made their filings. Analysts believe these funds could start trading as soon as this week.

First S-1 just rolled in today from VanEck.. they already had their fee so nothing to see here really, they just putting ball back in SEC’s court. Expecting the rest today except for Bitwise who did theirs last week.

These funds follow the SEC’s approval of spot Bitcoin ETFs, which have seen over $14 billion in inflows.

2 Reasons to Avoid Spot Ethereum ETFs

Ethereum funds will provide non-traditional crypto investors a way to track the price of Ethereum without dealing with some of the complexities of crypto, such as wallet keys. These funds are ideal for large institutional investors who find it overly complex to deal with real coins.

However, there are two main reasons why investors should consider investing in Ethereum directly instead of ETFs.

1. Lower Fees

Buying and holding Ethereum in a hot or cold wallet is relatively simple. Popular exchanges like Binance, Coinbase, and OKX make this process straightforward. After purchasing Ether, the only fee incurred is when selling the coins to exit the investment.

In contrast, Ethereum funds will have an expense ratio, likely around 0.25%. For example, Invesco Galaxy’s filing revealed a unified sponsor fee of 0.25%. This means a $100,000 investment would attract an annual fee of about $250. Over ten years, if Ether’s price remains steady, an investor would pay $2,500 in fees.

This fee differential explains why Bitcoin has had a better return than spot Bitcoin ETFs. In the past six months, Bitcoin has risen by 24.31% while the ETFs have risen by about 20.7%. This spread will compound over time.

2. No Staking Features

Ethereum funds will not offer staking features, which provide a steady income to investors. Data shows that the total staked Ether stands at over $100 billion, with a staking ratio of 27.16%. It has a yield of about 3.29%, meaning a $100,000 investment will return nearly $3,300 a year through staking.

Therefore, since Ether and spot ETH ETFs will move in sync, it seems more beneficial to just stake Ether.

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