Fidelity Let's You Go Full YOLO On Ethereum, but Should You?

"Fidelity Ethereum Fund (NYSE:FETH) holds actual Ether tokens and tracks their price. When Ethereum rises or falls, so does your investment. No leverage, no options overlay, no income generation. The fund charges 0.25% annually to warehouse crypto in your brokerage account. It launched in July 2024 with $2.2 billion in assets. The return engine is pure price speculation. Ethereum's value depends on network activity, developer adoption, and market sentiment around smart contracts and decentralized applications."

"FETH has delivered a 16% loss since inception. Investors who bought at launch are underwater after five months. The fund tracks Ethereum nearly perfectly, capturing every stomach-churning swing. In the past 60 days alone, Ethereum experienced four separate days with 8% to 10% intraday price swings. The S&P 500 gained 16% over the same period FETH lost 16%, a 32-percentage-point gap. Even within crypto, Bitcoin ETFs have outperformed, with iShares Bitcoin Trust (NASDAQ:IBIT) down just 12% versus FETH's 16% decline."

Spot Ethereum ETFs let investors hold Ether inside brokerage accounts without managing wallets or private keys. Fidelity Ethereum Fund (NYSE:FETH) holds actual Ether, tracks its price, charges 0.25% annually, and launched in July 2024 with $2.2 billion in assets. Returns come solely from price movements; Ethereum’s value depends on network activity, developer adoption, and market sentiment, with no cash flow or earnings. FETH lost 16% since inception and closely mirrors Ethereum’s high volatility, including four 8–10% intraday swings in 60 days. Investors accept regulatory, technical, and competitive risks and pay a 0.25% convenience fee that is higher than fees on some exchanges.

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