President Donald Trump’s administration, which has championed cryptocurrencies, recently announced that it will create a strategic reserve fund that will include leading cryptos such as Bitcoin (BTCUSD), Ethereum (ETHUSD), Solana (SOLUSD) and XRP (XRPUSD), among others.
Bitcoin is the largest, and undoubtedly the most popular. However, investors can also consider smaller Ethereum to benefit from the crypto-friendly environment. Why? Let’s have a closer look.
About Ethereum
Ethereum (ETHUSD) is a decentralized, open-source blockchain that enables developers to build and deploy smart contracts and decentralized applications (dApps). One reason that some investors prefer ETH is that in addition to tranactions, its blockchain allows staking, supports non-fungible tokens, and hosts a variety of decentralized finance (DeFi) platforms.
According to CoinMarketCap, It is the second largest cryptocurrency in the world with a market cap of about $277 billion.
Unlike Bitcoin, which has a fixed supply of 21 million, Ethereum is flexible with its supply allowed to expand or contract based on network activity.
Decentralised finance, or DeFi, remains a major component of the crypto industry, and Ethereum continues to be the dominant player in DeFi. With more than $50 billion in total votal value locked (TVL), Ethereum accounts for 65% of total crypto TVL. This refers to the amount of a cryptocurrency on a particular blockchain or platform.
Further, while alternative blockchains continue to gain traction, Ethereum’s extensive ecosystem and its commanding lead in developer engagement reinforce its entrenched position. The network’s dominance as the foundation for decentralized applications remains unshaken, and any meaningful shift away from its leadership appears unlikely in the foreseeable future.
However, as is the nature of cryptocurrencies, Ethereum is volatile. The cryptocurrency is down roughly 37% over the past year,
About the iShares Ethereum Trust ETF
The iShares Ethereum Trust ETF (ETHA) is an ETF designed to mirror the performance of Ethereum’s native token, ether. Launched on June 24, 2024, ETHA offers investors exposure to ether through traditional brokerage accounts, simplifying the process of investing in this prominent cryptocurrency.
The fund has net assets of over $2.8 billion with an expense ratio of 0.25%, or $25 on an initial $10,000 investment. The ETF is down 33% on a YTD basis.
Final Word
Ethereum continues to maintain its position as the leading platform for decentralized applications and DeFi, bolstered by a vast and continuously growing ecosystem. The strength of Ethereum’s developer community plays a pivotal role in sustaining its dominance in these sectors. While cryptocurrencies are inherently volatile, Ethereum’s long-term potential remains an attractive proposition for investors looking for opportunities in the digital asset space.
In light of this, the iShares Ethereum Trust ETF provides a regulated and straightforward means of gaining exposure to Ethereum, offering a valuable option for those wishing to participate in the cryptocurrency market through conventional investment vehicles.
