U.S. officially begins trading Ether ETFs, with funds from BlackRock, Grayscale and more.

• Ether is the native cryptocurrency on the ethereum blockchain.
• Ether is viewed as a greater investment in the expansion of blockchain and the broader crypto market, rather than just a digital form of gold like Bitcoin.
• This week, several funds are being launched with temporary fee waivers to entice clients.

On Tuesday, Ether ETFs started trading in the U.S., making it easier for professional investors and advisors to invest in the world's second largest cryptocurrency.

Another step towards mainstream finance's integration of digital assets is the new funds coming from traditional issuers like Fidelity and crypto-specific companies like Grayscale, with sources including traditional fund issuers and crypto-specific companies.

Ether, the native cryptocurrency on the Ethereum blockchain, is viewed as a more promising investment in the growth of blockchain and cryptocurrency as a whole, rather than just a digital form of gold like Bitcoin.

According to Jay Jacobs, U.S. head of active and thematic ETFs at BlackRock, Ethereum's allure comes from its decentralized character and its capacity to spur digital transformation across various sectors.

Since their launch in January, Bitcoin ETFs have attracted approximately $17 billion in net inflows, according to FactSet. However, it is predicted that ether ETFs will likely have smaller inflows compared to Bitcoin funds due to the larger market size of Bitcoin and the lesser familiarity of ether among many investors.

According to Sam Callahan, senior analyst at Swan Bitcoin, Ethereum is more confusing and unclear for both individual and institutional investors.

ETFs that track the ether token do not provide staking opportunities, which can increase returns for crypto-native investors.

This week, several funds will be launched with temporary fee waivers to entice clients. Following the waivers, management fees will range from 0.15% to 2.50%.

Grayscale is converting its multi-billion dollar private ether fund into two ETFs with different price points, making both the cheapest and most expensive funds available.

Despite a more than 50% increase in price year to date, the price of ether has remained relatively stable over the past month. Unlike bitcoin, which experienced a significant surge in demand before its fund launches in January, ether has not enjoyed the same level of growth.

Joel Kruger, strategist at LMAX Group, believes that the balance of risk is favorable due to the markets pulling back and the overall sentiment being in a position to be pleasantly surprised.

The price of the cryptocurrency was down slightly on Tuesday morning.

The Securities and Exchange Commission (SEC) has historically been cautious about cryptocurrencies, but lost a legal battle last year, resulting in the introduction of bitcoin ETFs in January. Given that both bitcoin and ether already have regulated futures markets, the introduction of ether ETFs was viewed as the next logical step for the industry.

Some, including the consumer advocacy group Better Markets, have criticized the SEC's decision to allow the funds.

Edelman Financial Engines' vice president, Wei Hu, suggested that some investors and advisers could make small allocations to crypto ETFs as a diversification play without taking on too much risk.

Hu stated that an investor should not hold a significant amount of either of these.