Bitcoin exchange-traded funds (ETFs) have opened up the door to the masses who want exposure to the red-hot cryptocurrency without having to go through the extra steps of adding a wallet. Undoubtedly, if you picked up shares of the incredibly popular iShares Bitcoin Trust (NASDAQ:IBIT | IBIT Price Prediction) a year ago when it first went live, you’re probably delighted with the returns you’ve raked in. Indeed, shares of the Bitcoin trust, which conveniently trades on the Nasdaq exchange, are up more than double (more than 122% since inception and close to 139% in the past year).
Though the quick double for early adopters of the IBIT allows prudent investors worried about the potential for immense volatility to “play with the house’s money” by selling half of their stake, it’s hard to whenever momentum is behind one’s back, and the headlines are almost always bullish and upbeat. Indeed, whether you’re a massive Bitcoin believer who’s convinced another double to more than $200,000 is in the cards over the next year, or if you’re just in the asset for diversification’s sake, I do believe investors should proceed with caution in 2025.
Though I don’t doubt Bitcoin’s ability to keep on running strong, I do think other options within the crypto universe are worth exploring. In this piece, we’ll examine the number-two crypto on the scene in Ethereum. Notably, does it make sense for Bitcoin bulls to spread some of their bets to some of the other less-appreciated cryptos out there? Let’s dive in.
iShares Ethereum Trust (ETHA): Is there any sense in owning this in addition to a Bitcoin ETF?
Bitcoin is the top dog in the crypto market, but let’s not forget about the runner-up in Ethereum. Given the propensity for all cryptocurrencies to move together, owning more than one crypto (beyond Bitcoin) probably won’t do all too much to eliminate the crypto market risk. That said, I do find Ethereum to be an intriguing option for crypto bulls looking to play a potential catch-up trade on the scene. Just like the stock market is a market of stocks, the crypto market is a market of individual cryptocurrencies. And while they can move together, oftentimes, there are factors that cause their performance to vary.
In the case of Ethereum and its ETFs (my favorite Ethereum ETF has to be the iShares Ethereum Trust (NASDAQ:ETHA), which also trades on the Nasdaq), prices are in bear market territory, down around 22% from their recent late-2024 highs and a bit more off their late-2021 all-time highs. Indeed, Ethereum and the ETHA ETF haven’t been nearly as hot as Bitcoin, actually down more than 9% in the past year. Why the performance gap of late? Undoubtedly, institutions have warmed up to Bitcoin more than they have Ethereum.
Indeed, it’s the number-one crypto out there, and it is viewed as synonymous with cryptos as a whole. The big question is whether the smart money (think big-league money managers) warm up to Ethereum in the same way they have Bitcoin. I have no idea. However, I do find products like ETHA intriguing from a relative value perspective—do remember, though, that there’s no real way to “value” them like with equities.
If you’re a believer in the Ethereum ecosystem, which remains robust but subject to greater competition, perhaps spreading one’s bets from Bitcoin to Ethereum can make sense.
The bottom line
Bitcoin boomed in 2024, while Ethereum took a bit of a breather. Will the roles reverse in 2025?
That’s the big question crypto traders should ponder. Personally, I have no idea. Either way, the iShares ETFs are my preferred way to play either cryptocurrency. Undoubtedly, iShares is a trusted name in the ETF scene with crypto offerings that many everyday retail traders and investors can get behind as they seek to expand their exposure within the space.
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