Ethereum vs. Ethereum ETFs: Which is right for you? A Zengo Wallet guide

TL;DR: The approval of Ethereum (ETH) ETFs has opened up exciting new opportunities for crypto investors. Should you jump on the ETF bandwagon or stick with holding Ethereum directly? This Zengo Wallet guide breaks it all down in simple terms, so you can confidently choose the path that’s right for you.

Introduction:

The introduction of Ethereum ETFs marks a significant milestone for crypto investments, offering investors mainstream ways to gain exposure to Ethereum. However, owning Ethereum directly through a secure platform like Zengo Wallet remains a popular choice for those who prefer a hands-on approach and greater control over their assets. Let’s explore both options to help you determine the best path for your investment journey.

What are Ethereum ETFs?

Recently approved, Ethereum ETFs are investment funds that trade on the stock market and track the price of Ethereum. Instead of buying Ethereum directly, you’re buying shares of a fund that holds it, offering a familiar way for investors to gain exposure to Ethereum without buying it directly. Here’s what you need to know:

  • Regulated: Benefit from the same investor protections as traditional stocks.
  • Easy Access: Purchase shares through major brokerage platforms.
  • Limited Trading Hours: Trading is restricted to stock market hours.
  • Management Fees: ETFs charge a yearly fee, typically ranging from 0.15% to 2.5% of your investment.
  • No Staking Rewards: ETFs do not currently offer the opportunity to earn staking rewards, however this could change in the future.

But what if you want more control and flexibility over your Ethereum investments? Let’s explore direct ownership with Zengo Wallet.

Own Ethereum directly: Your passport to a broader ecosystem

When you own Ethereum directly, you’re not only investing; you’re taking full ownership of a digital asset with a wide range of possibilities. Zengo Wallet empowers you to securely manage your Ethereum and unlock its full potential, offering:

  • Full Ownership & Control: You have complete control over your Ethereum assets.
  • Staking Rewards: Grow your ETH holdings by staking ETH through Zengo Wallet and earning up to 8% annually.
  • No Ongoing Fees: No yearly management fees; you only pay transaction fees when you use your ETH.
  • Enhanced Security with Zengo Wallet: Zengo Wallet has no seed phrase vulnerability ensuring your ETH remains secure in your wallet.
  • Unlock Ethereum’s Full Potential: With a self-custodial wallet like Zengo you can use ETH for transactions, participate in decentralized applications (Dapps), explore DeFi opportunities, and engage in the broader Ethereum ecosystem – none of which is possible through the Ethereum ETF.

Which is right for you?

The best way to invest in Ethereum depends on your personal preferences. Let’s explore key factors to consider:

Your comfort with technology and crypto:

  • ETFs: If you’re new to crypto or already familiar with investing in stocks and prefer a hands-off approach, Ethereum ETFs might be a good starting point, as they are similar to traditional stocks. They offer a simple way to gain exposure to Ethereum through existing brokerage accounts, without needing to manage crypto wallets or transactions.
  • Direct Ownership: If you’re eager to explore crypto’s potential, owning Ethereum directly gives you more control and flexibility. Zengo Wallet’s user-friendly interface makes it easy to buy, sell, send, receive, and stake your ETH, even if you’re new to digital assets and not especially tech-savvy. Even better: You’re always a simple tap away from Zengo’s legendary 24/7 live chat support, directly inside your Zengo wallet.

Your desired level of control and involvement:

  • ETFs: Offer limited control. You own shares of a fund, not the actual ETH, and can only trade during market hours. If there is a big move in price after hours, you cannot respond as quickly as you may want to.
  • Direct Ownership: Gives you complete control over your ETH, 24/7. You can use it for various purposes, including transactions, dApps, and staking to earn yield.

Your financial goals and risk tolerance:

  • ETFs: A more passive investment approach, suitable for portfolio diversification and risk-averse investors.
  • Direct Ownership: Offers potential for higher returns through staking and other activities and allows for a range of options: You can passively manage your ETH similar to what you would do with an ETH ETF, but you can also more actively manage your ETH (for example, swap ETH to a stablecoin if you want to lock in price gains).

ETF vs. direct ownership: A side-by-side comparison

FeatureEthereum ETFsDirect Ownership
with Zengo Wallet
Ownership
and Control
Shares of a fund
that holds Ethereum
Full ownership
and control
How to AccessBrokerage accountYour Zengo Wallet
Trading HoursLimited to market hours24/7, 365 with live support
FeesYearly management fee
(0.15% – 2.5%)
None to hold
Additional Factors– Regulated & familiar
to traditional investors
– Can’t use ETH in DeFi
or earn yield
Earn staking rewards
(up to 8%) & get full access
to Ethereum ecosystem

The bottom line: ETH v. ETH ETFs

  • ETFs: Simple, regulated, passive investment with potential for price appreciation. Ideal for hands-off investors.
  • Direct Ownership: More control, flexibility, and potential for higher returns through staking and other activities. Ideal for those comfortable with crypto and seeking a hands-on approach and full access to the Ethereum ecosystem, with enhanced security through Zengo Wallet’s keyless technology.

Ready to take the next step? New to Zengo Wallet? Download the app and experience the benefits of direct Ethereum ownership. Already a Zengo user? It’s the perfect time to explore your options for buying ETH.