Ethereum ETF Issuers Race to Launch Funds Amid Competitive Fee Strategies

Key Points:

• Major Ethereum ETF issuers including BlackRock, Fidelity, Invesco, and Bitwise are preparing to launch Ether ETFs, with competitive fee structures submitted to the SEC.
• The SEC has given preliminary approval to list spot Ether ETFs by July 23, with multiple issuers awaiting final regulatory clearance.

Ethereum ETF issuers like BlackRock, Fidelity, Invesco, and Bitwise have submitted fee structures to the SEC, preparing for a debut possibly next week. These funds will directly hold Ether, the second-largest cryptocurrency, and are awaiting final regulatory approval.

Read more: Grayscale Ethereum Mini Trust Approved With 0.25%% Asset Management Fee

Ethereum ETF Issuers Gear Up with Competitive Fees

Grayscale Investments disclosed it would maintain a 2.5% fee for its Grayscale Ethereum Trust (ETHE) upon conversion to a spot Ether ETF, significantly higher than competitors. They also announced a new product, the Grayscale Ethereum Mini Trust (ETH), seeding it with 10% of ETHE’s assets, over $1 billion based on current AUM. The Mini Trust will charge a 0.25% fee, reduced to 0.12% for the first year or until reaching $2 billion AUM.

BlackRock and Fidelity plan to charge a 0.25% sponsor fee, with initial discounts: BlackRock at 0.12% for the first $2.5 billion or 12 months, and Fidelity waiving fees until year-end. Bitwise and 21Shares set their fees at 0.20% and 0.21%, respectively, with six-month waivers or until hitting $500 million AUM.

VanEck’s fee is 0.21%, waived for 12 months or until $1.5 billion AUM. Franklin Templeton proposes a 0.19% fee, waived until reaching $10 billion AUM or until January 31, 2025. Invesco Galaxy will charge 0.25% without a waiver.

SEC Nears Approval for Multiple Spot Ether ETFs

“ This just shows how competitive these issuers expect things to be — and it’s going to be a battle to raise assets,” said James Seyffart, Bloomberg Intelligence analyst. He noted that many issuers faced similar competition with Bitcoin ETFs launched earlier this year, which collectively amassed $16.5 billion, with BlackRock’s Bitcoin ETF, IBIT, leading with $21 billion in assets.

The SEC has given preliminary approval to at least three Ethereum ETF issuers to list spot ETFs by July 23, with eight awaiting final approval after extensive dialogues and multiple amendments to their S-1 filings.