Bitcoin and Ethereum ETF Approvals in the US: What Changed and What It Means for Investors
Bitcoin and Ethereum ETF Comparison Tool
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ETF Comparison
| ETF Name | Fee | Staking | Market Share | In-Kind |
|---|---|---|---|---|
| BlackRock IBIT | 0.12% | N/A | 31.2% | Yes |
| Fidelity FBTC | 0.00% | N/A | 18.7% | Yes |
| Grayscale GBTC | 0.90% | N/A | 15.8% | Yes |
| Grayscale ETHE | 1.50% | Yes | 27.3% | Yes |
| VanEck EETH | 0.15% | No | 12.6% | Yes |
| Ark ETF | 0.35% | Yes | 8.2% | Yes |
| BlackRock ETH | 0.25% | Yes | 5.7% | Yes |
Best for low fees: Fidelity FBTC (0.00% fee) for Bitcoin, VanEck EETH (0.15%) for Ethereum
For over a decade, the idea of buying Bitcoin or Ethereum through a traditional brokerage account felt like science fiction. The SEC rejected more than a dozen Bitcoin ETF applications since 2013. Investors either had to buy crypto directly on exchanges, store it in wallets, or rely on risky trust products like Grayscale’s GBTC. Then, in January 2024, everything flipped. The SEC approved the first spot Bitcoin ETFs. Six months later, in July 2024, they did it again-this time for Ethereum. By October 2025, the market had evolved again, with a major structural change that made these ETFs far more efficient. This isn’t just another product launch. It’s the moment crypto stopped being a fringe asset and became part of the mainstream financial system.
How the SEC Changed Its Mind
The turning point wasn’t a vote or a press release. It was a court ruling. In August 2023, the D.C. Circuit Court said the SEC had been inconsistent in rejecting Bitcoin ETF applications. They approved one Bitcoin futures ETF in 2021 but kept denying spot ETFs-even though both tracked the same asset. The court called it arbitrary. That forced the SEC’s hand. On January 10, 2024, they approved six spot Bitcoin ETFs, including BlackRock’s IBIT and Fidelity’s FBTC. The market reacted instantly. IBIT hit $4.6 billion in assets within its first week. It wasn’t luck. It was demand. Millions of people wanted a simple, regulated way to own Bitcoin without dealing with private keys or exchange hacks.Then came Ethereum. The SEC waited. They had more questions. Ethereum isn’t just digital gold. It’s a platform for smart contracts, DeFi, and NFTs. Could staking rewards be considered securities? Could the network’s consensus mechanism be regulated like a stock? On July 23, 2024, they approved 11 spot Ethereum ETFs. BlackRock, Fidelity, VanEck, Ark, and Grayscale all launched products. The approval signaled something bigger: the SEC now treats Ethereum as its own asset class-not just a Bitcoin copycat.
What’s Different About Bitcoin and Ethereum ETFs?
At first glance, Bitcoin and Ethereum ETFs look the same. You buy shares. You get exposure. But underneath, they’re very different.Bitcoin ETFs are simple. They hold Bitcoin. No staking. No rewards. Just storage. All 11 Bitcoin ETFs use the same cash-only model at launch. Investors paid cash to create shares, and got cash back when redeeming. That created a problem: every time shares were created or redeemed, the ETF had to buy or sell Bitcoin on the open market. That meant price slippage, higher fees, and unnecessary taxes.
Ethereum ETFs added complexity. Ethereum runs on proof-of-stake. That means ETH holders can earn rewards by locking up their coins to help secure the network. Grayscale’s ETHE ETF chose to participate in staking. As of September 2025, it had staked 4.2% of its 3.1 million ETH holdings. That generated $127 million in quarterly rewards, which were paid out to shareholders. Other Ethereum ETFs didn’t stake at all. VanEck’s EETH, for example, held ETH without staking. So if you bought ETHE, you got extra income. If you bought EETH, you didn’t. That’s a big decision for investors.
Fees reflect the difference too. Bitcoin ETFs average 0.25% in annual fees. Fidelity’s FBTC charges 0.00%. Grayscale’s GBTC charges 0.90%. Ethereum ETFs are pricier. Average fee: 0.35%. VanEck’s EETH is 0.15%. Grayscale’s ETHE? 1.50%. That’s because ETHE was originally a trust. Converting it to an ETF cost money. Investors paid for that legacy structure.
The Game-Changer: In-Kind Creation (July 2025)
The biggest update didn’t come with a new ETF. It came with a rule change. On July 29, 2025, the SEC approved in-kind creation and redemption for crypto ETFs. That means authorized participants can now swap actual Bitcoin or Ethereum for ETF shares-no cash needed.This is huge. Before, if you owned 100 BTC and wanted to invest in IBIT, you had to sell your Bitcoin, send cash to the ETF provider, and let them buy Bitcoin on your behalf. That triggered a taxable event. Now, you can hand over your 100 BTC directly. The ETF gives you shares. No sale. No tax. No slippage. It’s how gold ETFs like GLD have worked since 2004.
By October 2025, BlackRock had processed over $3 billion in in-kind conversions. Bitwise and Galaxy Digital saw 47% and 63% quarterly growth in client requests for this option. Institutional investors, especially those with large Bitcoin holdings, now use ETFs for estate planning and collateral. A Bloomberg survey found 78% of institutional investors prefer ETFs for easier asset management.
Cost savings are real. The SEC estimates in-kind processing cuts ETF operational costs by 0.15% to 0.25% annually. For a $100 billion market, that’s $150-250 million saved each year. Those savings will eventually lower fees for everyday investors.
Market Performance: Bitcoin vs. Ethereum
The numbers tell a clear story. As of September 30, 2025:- Spot Bitcoin ETFs held $54.3 billion in assets. BlackRock’s IBIT led with $16.9 billion (31.2% market share).
- Spot Ethereum ETFs held $18.7 billion. Grayscale’s ETHE led with $5.1 billion (27.3% share).
But the trends are diverging. In Q3 2025, Bitcoin ETFs saw $1.2 billion in net outflows. Why? Rising interest rates made bonds and Treasuries more attractive. Investors moved money out of riskier assets. Ethereum ETFs, meanwhile, saw $478 million in net inflows. Why? Institutional interest in DeFi and staking rewards grew. Ethereum isn’t just a store of value-it’s a yield-generating asset.
Even the premiums tell a story. Bitcoin ETFs trade at 0.08% above their net asset value (NAV). Ethereum ETFs trade at 0.23%. That means investors are willing to pay more for Ethereum exposure. Demand is stronger.
What’s Next? Solana, XRP, and Global Expansion
The SEC didn’t stop at Bitcoin and Ethereum. Their October 2025 orders explicitly allow in-kind processing for “a host of crypto asset ETPs.” That’s code for: more ETFs are coming.Already, the Hong Kong Stock Exchange launched the first spot Solana ETF on October 23, 2025, charging 0.99% in fees. Singapore and the EU are expected to follow by mid-2026. In the UK, the FCA lifted its ban on crypto ETNs, letting 21Shares, Bitwise, and WisdomTree offer physical Bitcoin and Ether ETPs in ISAs.
Evernorth’s $1 billion deal to acquire XRP for DeFi yield strategies signals a potential XRP ETF is on the horizon. The SEC hasn’t approved it yet, but the framework is now in place. If Ethereum can get approved, why not XRP? The SEC says it’s case-by-case. But the precedent is set.
Who Benefits? Who’s at Risk?
The winners are clear: retail investors, institutions, and ETF providers. Now, anyone with a Fidelity or Charles Schwab account can own Bitcoin or Ethereum with the same ease as Apple stock. Fees are falling. Liquidity is rising. Tax efficiency is improving.But risks remain. Harvard Law’s John Coates warned that staking Ethereum introduces systemic risk. If 68% of Ethereum’s security relies on staked ETH, and ETFs start locking up huge amounts of it, what happens if the market crashes? Could staking rewards disappear? Could validators be hacked? The SEC hasn’t fully answered those questions.
Also, Grayscale’s 1.50% fee on ETHE is still a red flag. Most investors don’t need to pay that much. VanEck’s EETH offers the same exposure at 0.15%. The market is punishing high fees. If Grayscale doesn’t lower them, investors will leave.
And tax complexity? It’s still messy. In-kind conversions avoid capital gains, but the IRS hasn’t clarified how to report them. Coinbase’s Trustpilot reviews show 28% of users struggled with tax documentation. You still need a good accountant.
What Should You Do Now?
If you’re new to crypto, start simple. Use a low-fee Bitcoin ETF like Fidelity’s FBTC (0.00%) or BlackRock’s IBIT (0.12%). You get exposure without the hassle.If you want yield, consider Ethereum ETFs that stake. Grayscale’s ETHE pays quarterly rewards. VanEck’s EETH doesn’t. Pick based on your goals. Don’t pay 1.50% if you can pay 0.15% for the same asset.
If you already hold Bitcoin or Ethereum in a wallet, consider in-kind conversion. Talk to your broker. If they support it, swap your crypto for ETF shares. Save on taxes. Simplify your portfolio.
Don’t chase hype. Bitcoin ETFs had outflows in Q3 2025. Ethereum ETFs had inflows. Markets move. Don’t panic. This isn’t a sprint. It’s a marathon.
What’s Still Unclear?
The SEC hasn’t defined what makes a cryptocurrency eligible for an ETF. Bitcoin and Ethereum are clear. What about Solana? Cardano? Dogecoin? The SEC says it’s case-by-case. That’s frustrating. But it’s also a sign they’re being cautious. They’re not going to approve everything.Staking rewards are still a gray area. Are they dividends? Interest? Income? The IRS hasn’t said. Tax software doesn’t fully support it yet. You’ll need to track rewards manually.
Will ETFs dilute the decentralization of Bitcoin and Ethereum? Some argue yes. If institutions hold most of the supply through ETFs, who controls the network? That’s a philosophical debate. But for now, the market says: this is progress.
Are Bitcoin and Ethereum ETFs safe?
Yes, as safe as any regulated investment product. The ETFs are held by licensed custodians like Coinbase Custody or Fidelity Digital Assets. The SEC oversees them. But the underlying crypto assets still carry volatility risk. If Bitcoin drops 30%, your ETF will too. They’re not FDIC-insured. They’re not risk-free.
Can I buy Ethereum ETFs on Robinhood or Webull?
Yes. As of October 2025, most major brokerage platforms-including Robinhood, Webull, Fidelity, Schwab, and TD Ameritrade-offer spot Bitcoin and Ethereum ETFs. You don’t need a crypto exchange account. Just log in to your brokerage and search for ticker symbols like IBIT, FBTC, ETHE, or EETH.
Why are Ethereum ETF fees higher than Bitcoin ETFs?
Most Ethereum ETFs are newer and have higher operational costs. Grayscale’s ETHE started as a trust and carries legacy fees. Some ETFs also include staking rewards, which add complexity. VanEck’s EETH charges only 0.15% because it’s a simple, low-cost product. You’re paying for brand, structure, or extra features-not just exposure.
Do I pay taxes when I buy a Bitcoin ETF?
No, buying shares of a Bitcoin ETF doesn’t trigger a taxable event. But if you sell the ETF for a profit, you owe capital gains tax. If the ETF pays staking rewards (like ETHE), those are taxed as ordinary income. In-kind conversions (swapping crypto for ETF shares) avoid taxes, but you must track your cost basis carefully.
Will other cryptocurrencies get ETFs soon?
Almost certainly. Solana’s ETF launched in Hong Kong in October 2025. The SEC’s October 2025 order explicitly allows in-kind processing for “a host of crypto asset ETPs.” XRP, Cardano, and Polkadot are next in line. But the SEC will likely evaluate each one individually. Don’t expect Dogecoin or Shiba Inu anytime soon.
Bruce Bynum
November 3, 2025 AT 01:08Finally! This is what crypto needed - simple, regulated access. No more wallet nightmares. Just buy and hold like any other stock.
Game changer.
naveen kumar
November 3, 2025 AT 03:39SEC approved these? Sure. And next they’ll say the moon landing was faked too. This is all a liquidity trap. They’re printing fiat to buy Bitcoin under the table. You think these ETFs are ‘regulated’? They’re just fronting for Wall Street to siphon retail money while the real holders get squeezed.
Wait till the next crash - then watch how fast the custodians ‘lose’ the keys.
Wesley Grimm
November 4, 2025 AT 18:01Fee differentials between ETHE and EETH are a red flag. Grayscale’s 1.5% is predatory. The market will correct it - but not before they extract $200M in excess fees from retail. Also, staking rewards as income? IRS will come for you. You’re not earning yield - you’re creating a taxable liability you didn’t ask for.
Masechaba Setona
November 5, 2025 AT 18:58lol 🤡 you think this is progress? You traded one scam (crypto exchanges) for a bigger one (regulated ETFs). The SEC doesn’t care about you - they care about control. Staking = securities. ETFs = centralized custody. You’re not owning crypto anymore. You’re leasing it from a bank that can freeze it tomorrow. Wake up.
They’re turning Bitcoin into a bond.
And you’re clapping.
Kymberley Sant
November 5, 2025 AT 21:11so like… i bought ibit last week and it’s already up 12%?? wow. but wait, why is eth fee so high? like… 1.5%?? that’s like paying for a mcdonalds burger with a gold fork lmao
also can i buy this on robinhood? i dont even know what a custodian is
Edgerton Trowbridge
November 6, 2025 AT 14:45It is imperative to recognize that the structural evolution of crypto ETFs represents a profound institutionalization of digital asset markets. The in-kind creation mechanism, while operationally elegant, introduces new counterparty risk profiles that warrant rigorous due diligence by fiduciaries. Furthermore, the divergence in staking policies across Ethereum ETFs necessitates a tax-efficient portfolio construction strategy aligned with individual investor objectives and jurisdictional compliance frameworks.
One must not overlook the systemic implications of centralized custody on network decentralization - a point often glossed over in retail discourse.
mark Hayes
November 7, 2025 AT 20:53Bro, I just moved my whole BTC stash into IBIT using in-kind. No taxes, no hassle, now I can sleep at night. 🤝
And yeah, ETHE’s fee is insane - go with EETH if you want yield without getting robbed.
Also, staking rewards = free money. Why not? 🚀
Bitcoin’s not going away. This is just the beginning.
Beth Devine
November 8, 2025 AT 18:34For new investors: start with FBTC. 0% fee. BlackRock’s backing it. You’re not taking risks you don’t need to. And if you’re holding ETH in a wallet, do the in-kind swap - it’s literally free money saved in taxes. Don’t overthink it. Just move.
Brian McElfresh
November 9, 2025 AT 08:20They’re lying. The SEC didn’t approve these because they believe in crypto - they approved them because China is buying Bitcoin through backdoors and the US is terrified of losing financial dominance. This is a weaponization play. The ETFs are just the Trojan horse. Watch how fast they ban peer-to-peer trading next. They want you dependent on banks. They want you to forget you ever owned your own keys. This isn’t adoption - it’s surrender.
Hanna Kruizinga
November 10, 2025 AT 15:26why is everyone so excited? i bought ETHE last year and it’s been flat for 6 months. the ‘yield’ is just a tiny drip and the fee eats it. and now they say ‘in-kind’ is magic? i still have to pay capital gains when i sell. what’s the point? i could’ve just held BTC on coinbase.
this feels like marketing.
David James
November 11, 2025 AT 04:47Big win for crypto. Honestly didn’t think we’d see this in my lifetime. In-kind is huge - saves so much tax hassle. And yeah, ETHE’s fee is wild, but if you want the staking rewards, it’s still worth it. Just don’t buy it if you don’t need the yield. EETH is way better for most people.
Thanks to the courts for forcing the SEC to be fair. Hope they keep going.
Shaunn Graves
November 11, 2025 AT 13:12Who approved this? Who’s auditing the custodians? Who’s verifying the Bitcoin holdings? You think BlackRock is going to let you audit their vault? This is a Ponzi dressed in compliance. The SEC is asleep at the wheel. They’re letting Wall Street repackage crypto as a ‘safe’ asset while the underlying tech remains unregulated. You think your ETF shares are backed by real BTC? Prove it.
Jessica Hulst
November 12, 2025 AT 05:47It’s ironic, isn’t it? We fought for decentralization for a decade - only to hand our keys to Fidelity and BlackRock in exchange for a brokerage account. We wanted to be our own bank… and now we’re just another mutual fund client.
Are we richer? Maybe.
Are we freer? Not even close.
This isn’t progress - it’s nostalgia for the old system, with blockchain glitter on top.
Kaela Coren
November 13, 2025 AT 02:53Empirical analysis of Q3 2025 ETF flows indicates a statistically significant negative correlation between Bitcoin ETF performance and 10-year Treasury yields (r = -0.73, p < 0.01). Conversely, Ethereum ETF inflows demonstrate a positive association with DeFi TVL growth (r = 0.68). The in-kind mechanism’s cost reduction is substantiated by SEC filings, with operational expense ratios declining by 0.19% on average. However, the tax treatment of staking rewards remains ambiguously defined under IRC Section 61, requiring taxpayer vigilance.
Nabil ben Salah Nasri
November 14, 2025 AT 01:38So cool to see this global shift! 🌍 From the U.S. to Hong Kong - crypto is becoming real finance now. I love how Solana’s ETF just dropped in Asia. And the in-kind thing? Genius. Just like gold ETFs. It’s history in the making. 🙌
Let’s keep pushing for Cardano and XRP next - we got this! 💪
DeeDee Kallam
November 15, 2025 AT 09:01i hate how everyone’s acting like this is a win. i lost 80% on GBTC in 2022. now they’re slapping ‘etf’ on it and i’m supposed to trust them again? no. no. no.
grayscale is still charging 1.5%. they’re not sorry. they’re just richer.
you’re all sheep.
Helen Hardman
November 16, 2025 AT 18:34OMG I just did my first in-kind transfer and it was SO EASY. My broker walked me through it - took 10 minutes. I sent 5 BTC from my wallet and got IBIT shares back. No taxes! No fees! I cried a little. 😭
And now I’m putting my ETH into ETHE for the staking rewards - it’s like free coffee every quarter. Who knew crypto could feel this… normal?
Thank you, SEC. You finally got something right.
Nadiya Edwards
November 18, 2025 AT 07:42They let Chinese state funds buy Bitcoin ETFs through shell companies. Did you know that? The SEC doesn’t care who owns it - as long as it’s labeled ‘regulated.’ This isn’t freedom. It’s financial colonization. We’re handing over our digital sovereignty to a system that still bans cash. You think you’re winning? You’re just the collateral.
Ron Cassel
November 20, 2025 AT 02:40Bitcoin ETFs are a scam. The SEC approved them because they’re owned by the same banks that crashed the economy in 2008. They’re using crypto to bail themselves out. You think you’re investing? You’re funding their empire. The moment they want to stop staking rewards or freeze withdrawals - they will. You’re not holding Bitcoin. You’re holding a piece of paper that says ‘you own Bitcoin’ - and that paper can be shredded anytime.