Pick up investment strategies before the ETH ETF is accepted

There are many reasons to be optimistic about the recent adoption of Spot Ether (ETH) exchange-traded funds (ETFs). First, the United States Securities and Exchange Commission approved 11 Bitcoin (BTC) ETFs in January 2024, showing a more favorable view of cryptocurrencies in general. This was a historic milestone for the crypto industry. For the first time, the SEC has allowed investors to access major cryptocurrencies through a regulated and mainstream investment vehicle.

Second, Ether has a strong case to be classified by the SEC as a commodity rather than a security. This is an important distinction, as commodities are subject to less stringent regulations than securities and are therefore more likely to be eligible for ETFs.

Ether is considered a commodity by many experts and authorities, including the US Commodity Futures Trading Commission, the UK-based Financial Conduct Authority and Bloomberg ETF analysts. The Ethereum blockchain is the backbone of the decentralized finance and blockchain sectors, which are growing in innovation and adoption, and demonstrate the benefits and value of the network.

Third, there is strong interest from retail and institutional investors and demand for spot ETH ETFs. According to a recent survey by Bitwise Asset Management, 98% of financial advisors currently allocated to crypto in client accounts intend to maintain or increase their exposure in 2024, which favors ETH.

Chris Kuiper, director of research at Fidelity, shared his insights on why Ether may be a more attractive investment option for institutional investors than Bitcoin. He pointed out that understanding bitcoin as an investment requires exploring complex topics such as politics, philosophy, game theory and economics. In contrast, Ether provides a more straightforward view by highlighting fundamental metrics and cash flow data. Kuiper believes that providing these parameters to institutional investors will make ETH look like a conventional financial instrument, making it easier for them to interact with the asset.

Additionally, there are several spot ETF applications pending with the SEC, such as the Fidelity Ethereum Fund, the WisdomTree Ethereum Trust and the BlackRock iShares Ethereum Trust. These are some of the most prominent and influential asset managers in the world, and their involvement could sway the SEC's decision to favor spot ETHAFs.

Given the positive outlook for spot ETH ETFs, how should investors prepare for the approval? There is no right answer as different investors have different risk appetites, time horizons and market views. However, depending on whether one is bully or brave on the ether, here are some strategies to consider.

For investors who are optimistic about the approval of spot ETH ETFs, there are several ways to benefit from the protection and consideration of approval, such as:

Where to Buy ETH: The easiest and most direct way to gain exposure to Ether's price appreciation is to buy and hold ETH on a crypto exchange or wallet. However, this also involves the highest risk and cost, as the investor must deal with the volatility, security and protection issues of holding and storing Ether directly.

Buying ETH Futures ETFs: Another way to gain exposure to Ether's price appreciation is to buy and hold futures-based ETH ETFs, such as the VanEck Ethereum Strategy ETF or the ProShares Ether Strategy ETF. These ETFs track the price of Ether by holding futures contracts that promise to deliver ETH at a future date and price. However, this also involves some risk and cost, as the investor has to deal with the contango, roller and tracking error issues of holding and trading futures contracts. Buying call options on ETH or ETH ETFs: A more sophisticated, leveraged way to gain exposure. Exposure to Ether's price appreciation is by buying call options on ETH or ETH ETFs, such as CME ETH Options. These options give the investor the right, not the obligation, to buy ETH or ETH ETF in advance at a certain price and date. But this also involves the highest risk and cost because the investor has to pay a premium for the options, and if the price of the Ether or ETH ETF does not exceed the expiration price, the options may be worthless. Between different ETH products: A more complex arbitrage-based way of exposure to Ether price appreciation is to use the price differences between different ETH products, such as spot ETH, futures-based ETH ETFs, spot ETH ETFs (if available in other regions) and ETH derivatives. But this also involves considerable skill and capital, as the investor must identify and execute arbitrage opportunities and avoid market and operational risks.

Ethereum is one of the most innovative and influential platforms in the crypto space, and the adoption of spot ETFs could be a game changer for the industry. However, approval is not guaranteed, and timing is uncertain. Therefore, investors should be prepared for different scenarios and adopt appropriate strategies according to their risk appetite, time horizon and market outlook. To aid their strategies, investors may consider using a powerful trading dashboard such as Cointelegraph Markets Pro.

Whether one is bullish or bearish on Ether, there are many ways to invest in cryptocurrency before a potential spot ETH ETF is approved, and from the expected and predictable gains from such confirmation. But remember, this is not financial advice.

See how Cointelegraph Markets Pro provides market-moving data before this information becomes public knowledge.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.