Investing in Ethereum (ETH) and Ethereum ETFs offers distinct advantages and challenges. This overview outlines the benefits and drawbacks of each option to help you make decisions aligned with your investment objectives and risk comfort.
Buying Ethereum Directly
Pros:
- 24/7/365 Days a Year Access: This around-the-clock availability ensures you can buy and sell ETH instantly during market changes any day of the year, maximizing opportunities for profit and risk of loss over your investments. Unlike Ethereum ETFs, which limit you to only 1,631.5 total hours of access per year, Real ETH operates 24 hours per day, providing 8,760 total hours of access per year. Therefore, owning Real Ethereum offers 80% more access compared to Ethereum ETFs.
- Complete Ownership: Direct investment means you own the actual ETH, giving you full control over your investment.
- No Intermediary: Direct purchase eliminates the need for a fund manager or intermediary.
Cons:
- Market Volatility: ETH prices can be volatile.
- Custody: Self-custody can create issues. Platforms like iTrustCapital offer a solution by providing institutional-level custody management. This approach mitigates the complexities and risks associated with self-custody.
Investing in an Ethereum ETF
Pros:
- Mass Adoption: Investing through an ETF broadens Ethereum adoption and in general makes it more mainstream.
- Regulated Environment: ETFs are subject to regulatory oversight.
- Custody: Investors don't have to deal with custody as they do not actually own the ETH, but instead own a share in the ETF.
Cons:
- Market Hour Limitations: Trading ETFs is restricted to market hours. The traditional Stock Exchange operates for just 6.5 hours per day and is closed on weekends and holidays, providing only 251 days of access per year. With an Ethereum ETF, you have access to only 1,631.5 total hours per year, whereas with Real ETH, you have access to 8,760 total hours per year. So, Ethereum ETFs offer 80% less access to seize the opportunities of market movements compared to owning Real ETH, which provides access every hour of every day, 365 days a year.
- Management Fees: Investing in Ethereum ETFs may incur higher fees compared to direct Ethereum purchases. Specifically, the management fees for the 11 approved Ethereum ETFs vary, ranging from 0.20% to 1.5% annually. This is in addition to any transaction fees that may apply. In contrast, holding Ethereum directly on platforms such as iTrustCapital doesn't involve any management fees.
- Lack of Direct Ownership: Investors in Ethereum ETFs don't own the actual Ethereum, potentially missing out on certain benefits such as the tax-deferred* advantages you get owning ETH inside of a self-directed IRA with a company like iTrustCapital.
Choosing between direct Ethereum (ETH) and investing in Ethereum ETFs will depend on your personal investment strategy and risk tolerance. Each offers unique advantages and should be considered carefully.
For those interested in expanding their portfolio with real Ethereum (ETH) and other crypto assets, iTrustCapital offers a platform to buy and sell crypto within a tax-advantaged Crypto IRA*, merging the growth potential of crypto with the tax benefits of IRA investments.
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*Some taxes and conditions may apply.
DISCLAIMER
This article is for information purposes only. It does not constitute investment advice in any way. It does not constitute an offer to sell or a solicitation of an offer to buy or sell any cryptocurrency or security or to participate in any investment strategy.
iTrustCapital is a cryptocurrency IRA software platform. It is not an exchange, funding portal, custodian, trust company, licensed broker, dealer, broker-dealer, investment advisor, investment manager, or adviser in the United States or elsewhere. iTrustCapital is not associated with and has no direct relationship with Ethereum (ETH). iTrustCapital is not affiliated with and does not endorse any particular cryptocurrency, precious metal, or investment strategy.
Cryptocurrencies are a speculative investment with risk of loss. Precious metals are a speculative investment with risk of loss. Cryptocurrency is not legal tender backed by the United States government, nor is it subject to Federal Deposit Insurance Corporation (“FDIC”) insurance or protections. Clients do not receive a choice of custody partner. The self-directed purchase and sale of cryptocurrency through a cryptocurrency IRA have not been endorsed by the IRS or any regulatory agency. Historical performance is no guarantee of future results.
Some taxes and conditions may apply depending on the type of IRA account. Investors assume the risk of all purchase and sale decisions. iTrustCapital makes no guarantee or representation regarding investors’ ability to profit from any transaction or the tax implications of any transaction. iTrustCapital does not provide legal, investment or tax advice. Consult a qualified legal, investment, or tax professional.
iTrustCapital makes no representation or warranty as to the accuracy or completeness of this information and shall not have any liability for any representations (expressed or implied) or omissions from the information contained herein. iTrustCapital disclaims any and all liability to any party for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising directly or indirectly from any use of this information, which is provided as is, without warranties.
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