Comparing Bitcoin and Ethereum ETFs: Volatility, Cost, and Performance

The cryptocurrency market has been gaining increasing attention in recent years, with more investors looking to diversify their portfolios by adding digital assets. Two popular exchange-traded funds (ETFs) that offer pure-play access to leading cryptocurrencies are the Fidelity Wise Origin Bitcoin Fund (FBTC) and the iShares Ethereum Trust ETF (ETHA).

Both FBTC and ETHA aim to track the price of a single digital asset: bitcoin and ether, respectively. They provide mainstream brokerage access to crypto exposure without requiring direct wallet management. This comparison looks at cost, performance, risk, and portfolio focus to help investors weigh the tradeoffs between these highly concentrated, high-volatility funds.

FBTC remains the larger fund by assets under management (AUM), with $12.3 billion in AUM compared to ETHA's $6.7 billion. However, both funds have experienced significant price fluctuations over the past year, with FBTC posting a 1-year return of -21.4% and ETHA posting a 2.18% return.

While ETHA has posted a larger drawdown than FBTC over the same time horizon, reflecting ether's higher historical volatility, both funds are highly volatile. Their returns are driven by different factors, with FBTC influenced by institutional flows, macro liquidity, and overall sentiment toward digital assets, while ETHA is influenced by the Ethereum network and expectations for blockchain usage, decentralized applications, and ecosystem growth.

In terms of cost, both FBTC and ETHA have an expense ratio of 0.25%. However, their beta measures price volatility relative to the S&P 500, with FBTC having a beta of 1.33 compared to ETHA's beta of 2.45. This suggests that FBTC is more correlated with the broader market than ETHA.