Spot Ethereum ETF Fee Fight Shapes Up
Filings ahead of an expected July 23 debut show seven funds will include full or partial fee waivers for initial periods.
The competition among spot Ethereum ETF fees took full shape on Wednesday with revised S-1 registration statements from eight issuers specifying what they will charge investors for their proposed funds.
Except for the Grayscale Ethereum Trust (ETHE), fees for the proposed ETFs will range from 0.15% to 0.25%, according to documents filed with the Securities and Exchange Commission in June and this month. Seven of the funds will include fee waivers for an initial period of at least six months. Grayscale will charge 2.5% for its product, which differs from the other proposed spot Ethereum ETFs because it is a conversion from an existing trust.
"Let the ETHness Stakes begin (next week)," quipped Bloomberg ETF Analyst James Seyffart in an X post.
Seyffart and other observers widely expect the funds to begin trading on July 23. The ETFs are based on the price of ether, the native cryptocurrency of the Ethereum smart contracts blockchain and second largest digital asset with a $420 billion market capitalizations. Earlier this week, a total of four of the funds received preliminary approval from the regulator, according to separate reports from Reuters and Bloomberg.
Similar to Spot Bitcoin Fee Fight
The emerging fee fight is similar to the contest that unfolded during the run-up to SEC approval of spot bitcoin ETF and in the immediate aftermath with a number of issuers waiving entirely or cutting their expense ratios for periods to lure investors. Only the ProShares Ethereum ETF, which was filed later than the other nine funds currently under SEC consideration, has yet to file an expense fee.
Among the spot Ethereum ETF issuers:
- The Grayscale Ethereum Mini Trust (ETH) will charge 0.15%, the lowest among the issuers The Grayscale Mini Trust, which is based on Grayscale's Ethereum trust, will waive its fee entirely for six months but with a $2 billion threshold.
- Franklin Templeton, which in June became the first issuer to announce its fee, will charge 0.19% for its Franklin Ethereum ETF (EZET). The ETF will waive its fee until Jan. 31, 2025 or when it hits $10 billion in assets.
- The VanEck Ethereum ETF (ETHV) and Bitwise Ethereum ETF (ETHW) will charge 0.20%, while the 21Shares Core Ethereum ETF has set a 0.21% expense ratio. VanEck will waive its fee for one year or when the fund reaches $1.5 billion in assets. Bitwise will waive its fee for six months or when the fund reaches $500 million, while 21Shares will waive its fee for 12 months or when it also totals $500 million in assets.
- The Fidelity Ethereum Fund (FETH), BlackRock's iShares Ethereum Trust (ETHA), and the Invesco Galaxy Ethereum ETF (QETH) will charge 0.25%. Fidelity will waive its fee until the end of 2024. iShares will cut its fee to 0.12% for 12 months or when it accumulates $2.5 billion in assets.
Ether was recently trading at about $3,420, up about 1% over the past 24 hours, according to crypto markets data provider CoinMarketCap. The asset has risen about 12% during the last week amid a wider surge in crypto markets fueled at least partly by the rising presidential prospects of Donald Trump who has aligned himself with the cryptocurrency industry.
IBIT Soars
The iShares Bitcoin Trust (IBIT) and Fidelity Wise Origin Bitcoin Fund (FBTC) have generated about $19 billion and $10 billion in inflows, the most among the spot bitcoin funds that began trading earlier this year, according to U.K. asset manager Farside Investors. The 11 funds now manage about $55 billion in assets.
UPDATE (July 18, 2024, 7:22 ET): Reflects amended filing on the fee for the Grayscale Ethereum Mini Trust and more current ether price.
