ETFS 21Shares Ethereum ETF
Exchange Code: EETH
ETFS 21Shares Ethereum ETF (Cboe: EETH) offers exposure to physical ether, one of the best-performing assets of the past five years.
EETH tracks the performance of the price of ether, which is the native currency of the Ethereum blockchain, in Australian dollars before fees and expenses. It provides holders with a beneficial interest in ether held in cold storage by Coinbase, the world's largest custodian of cryptocurrency. It gives investors a way to trade ether in a tightly regulated environment without the need to establish and maintain their own Ethereum wallets and the risks associated with that.
Ethereum is a blockchain that allows for a special type of function called "smart contracts" thanks to its coding language Solidity. These contracts allow for terms agreed between parties to automatically execute on a blockchain, potentially alleviating some of the need for lawyers. Ethereum has been the driving force between non-fungible tokens (NFTs), which allow ownership of online images and videos. Ethereum is also used to power other blockchain networks, such as Uniswap, Polygon and Chainlink.
Why consider EETH
Access to one of the best performing assets in the past five years.
Trade ether on reputable and highly regulated exchanges.
Use your existing bank and brokerage account, without the risk of losing an Ethereum wallet or forgetting passwords.
Since the crypto market is still relatively young, there can be issues with buying ether directly. These include low exchange quality, weak custody arrangements, vulnerability to security problems, the loss of private keys and passwords, and much more. At ETF Securities, our mission is to bring a higher quality Ethereum proposition than what is already available to Australians.
EETH is 100% physically backed by ether, the private keys to which are segregated, and deposited into an offline wallet, known as "cold storage". Investors can buy the ETF directly through their existing brokerage account and do not require any resources for the management, custody and security of ether.
Ethereum is the name of the blockchain network that aims to be something like an all-purpose internet service, attempting to disrupt Amazon's AWS, Apple's app store and much else. Within the Ethereum blockchain, ether is the currency or token that is used to reward miners and make payments. As with Bitcoins, ether is mined and collected by those who maintain the network. EETH therefore invests in ether, however as ether is the currency of the Ethereum network, it is also inextricably investing in the network.
Bitcoin and Ethereum are both examples of blockchain technology. However, the similarities end there. Bitcoin is like a pocket calculator. It has one function: keeping track of transactions between parties. Ethereum, by contrast, has more use cases. Thanks to its “smart contracts” function, which are contracts that are automatically executed on its blockchain, Ethereum can be used more broadly. For this reason, Ethereum is at the heart of much crypto innovation, including non-fungible tokens (NFTs), and decentralised autonomous organisations (DAO).
There are various ways to secure an Ethereum wallet, the popular ones being to encrypt a wallet by using a strong password and to make a backup of the wallet. However, the best method is cold storage. This involves storing Ethereum private keys offline, meaning away from any internet access. Keeping ether offline substantially reduces the threat of hacking. As an additional layer of security, all movements from these cold storage accounts require approvals from multiple individuals, as the private keys are “sharded” – meaning they are broken up and distributed across many global servers– before funds can be released.