Ethereum Investors Face Off: Direct Ownership vs Exchange-Traded Products

Investors seeking exposure to Ethereum have two main options: buying ETH directly or purchasing shares of an Ethereum exchange-traded product. The distinction has become more important as institutional Ethereum products expand.

BlackRock's iShares Ethereum Trust ETF (ETHA) is a notable example, holding approximately $5.65 billion in net assets as of August 12, 2026. An Ethereum ETF allows investors to gain ETH exposure through a traditional brokerage account without personally managing wallets or private keys.

The convenience comes at a cost. ETHA charges a 0.25% sponsor fee, which reduces returns relative to directly holding the underlying asset. Investors also own shares of a trust rather than ETH itself and cannot transfer those shares to an Ethereum wallet or use them within decentralized applications.

Direct ETH provides full on-chain utility, allowing investors to transfer between wallets, use as collateral in DeFi, spend on Ethereum transaction fees, or deposit into staking infrastructure. This is increasingly relevant, with approximately $79 billion worth of ETH staked and the network securing roughly $230 billion in value.

Staking-enabled Ethereum products have emerged, narrowing the difference. BlackRock's iShares Staked Ethereum Trust ETF (ETHB) launched in March 2026, providing ETH price exposure alongside staking-related economics and a temporarily reduced sponsor fee of 0.12% during its initial 12-month waiver period.