Ethereum ETFs Gain Traction in Gulf Markets

Last month, I was sitting in a coffee shop near Abu Dhabi’s corniche when a wealth manager I know slid his phone across the table. An order ticket for a US-listed Ethereum ETF appeared on the screen; it was placed, rather improbably, through his local bank. He claimed that order would have required three platforms and a tiny leap of faith two years ago. Like any other trade, it just sits there now, blinking.

That little fact reveals a lot about the current state of the Gulf markets. Ether ETFs, which were only approved by US regulators in May 2024, have quietly emerged as one of the more talked-about products in the area. It seems that curious retail traders are no longer the only ones driving the appetite. Pension funds, family offices, and even Sharia-screened mandates are beginning to appear in the digital asset space.

The numbers are significant in and of themselves. ETF trade value increased by 183% in March alone, according to ADX, and its ETF segment’s Q1 trading reached about AED 155 million, a 228% increase year over year. There are currently 23 listed ETFs on the exchange, and although not all of them directly deal with cryptocurrency, the overall signal is difficult to overlook. Repositioning is capital. And a lot of it is interested in ether in particular, in part because the asset now feels more like infrastructure than speculation.

It’s worthwhile to consider the reasons behind ether rather than just bitcoin. In 2024, Bitcoin ETFs made headlines, and for good reason—the inflows were astounding. Ethereum, however, has a different pitch. Tokenization, settlement rails, and smart contracts. Investors with ties to Gulf sovereigns who are considering the next ten years of finance will view that narrative differently than digital gold. “Bitcoin is the trade,” stated a trader I spoke with in Dubai. The wager on what will happen next is ether.

The regulatory environment is also important. Dubai now has a dedicated virtual-asset rulebook with actual licensing teeth thanks to its VARA framework, something that most other jurisdictions still lack. The majority of capital, which detests ambiguity, is drawn to that kind of clarity. Abu Dhabi has adopted a slightly different approach, depending on cross-border collaboration with US issuers such as KraneShares and the listing reforms implemented by ADX. Although the two emirates aren’t directly competing, they also aren’t working together.

As I watch this happen, I’m intrigued by how relaxed everything seems on the ground. No billboards are present. No flashy launches in ballrooms of hotels. Just family offices adding a little exposure, brokers updating their product menus, and sporadic, low-key cross-listing announcements. If there is any hype, it mostly exists on finance Twitter and Telegram channels rather than in the actual order flow, which has been remarkably consistent.

None of this is a guarantee, of course. The price of ether continues to fluctuate. Spot ETH ETFs in the US have experienced weeks of bleeding, but they recently recorded $103.5 million in net inflows in a single day. The situation remains unsettling due to geopolitical noise surrounding the Gulf of Oman, ongoing tensions between the United States and Iran, and larger macro nerves. I was told by a senior banker at DIFC that he is “constructive but not euphoric”—possibly the most Gulf expression I have heard this year.

A more subdued question looms over all of this: how much of the inflow is genuine conviction and how much is positioning ahead of additional regulatory dominoes, like tokenized treasuries and ETFs with staking capabilities. Whether the area wants to be a builder, a buyer, or both is still up for debate. Observing the development of Abu Dhabi’s pitch, I would assume both. However, ambition is less expensive than execution, which is where the Gulf has historically caught people off guard.

As of right now, the trend is significant enough to be taken seriously. Not revolutionary. Not a revolution. Just a steady, somewhat obstinate rotation toward an asset class that most Gulf institutions wouldn’t touch a few years ago. That is the story in and of itself.