The race to launch the first spot Ether exchange-traded fund (ETF) in the United States is intensifying, with several asset managers revealing their fee structures ahead of the anticipated launch.
BlackRock, a leading asset management firm, has taken the first step by disclosing the fee structure for its proposed spot Ether ETF in its S-1 registration statement filed on July 17th. The firm has set the annual management fee at 0.25%, which will be accrued daily and paid at least every three months. While BlackRock retains the discretion to waive or partially waive these fees, particularly during the initial launch period, the standard fee will apply after the first 12 months or upon reaching $2.5 billion in net assets.
BlackRock’s fee structure has set the benchmark for the industry, with other asset managers following suit. Franklin Templeton has announced a slightly lower fee of 0.19%, while VanEck and 21Shares have opted for a 0.20% fee. Fidelity and Invesco Galaxy have aligned with BlackRock, setting their fees at 0.25%.
However, several issuers have introduced fee waiver periods to attract investors. Bitwise, Franklin Templeton, VanEck, and 21Shares have all proposed waiving fees for a specific duration or upon reaching certain asset thresholds. For instance, Bitwise will waive fees for the first six months or until the ETF reaches $0.5 billion in net assets.
Grayscale’s Unique Approach
In contrast to the fee structures proposed by other asset managers, Grayscale Investments has maintained the 2.5% management fee for its existing Ethereum Trust. However, the firm is launching a new spot Ether ETF with a more competitive fee of 0.25%. Grayscale aims to seed this new ETF with $1 billion by transferring 10% of its existing Ethereum Trust assets.
The flurry of S-1 filings and fee disclosures comes as the SEC is expected to grant final approval for spot Ether ETFs. Bloomberg ETF analyst Eric Balchunas predicts that the SEC will sign off on the final S-1 filings on July 22nd, allowing ETFs to begin trading on July 23rd.
Industry experts anticipate significant investor interest in spot Ether ETFs. Tom Dunleavy, a managing partner at crypto investment firm MV Global, has predicted inflows of up to $10 billion within the first 18 months of launch. This level of interest is expected to drive price appreciation for Ether, similar to the impact seen with Bitcoin ETFs.
The impending launch of spot Ether ETFs marks a significant milestone for the cryptocurrency industry. With multiple asset managers competing for investor dollars, the focus will shift to product differentiation and performance. As the market matures, we can expect further evolution in fee structures and product offerings.
