Sokipiriye Dokubo
Revised Fee Structures
Various applicants for spot Ethereum (ETH) Exchange-Traded Funds (ETFs) have made amendments to their S-1 filings on July 17. These updates disclose sponsor fees and waiver details to the U.S. Securities and Exchange Commission (SEC) as they prepare for potential trading launch in the upcoming week.
Details of Sponsor Fees and Waiver Periods
BlackRock has initiated a competitive sponsor fee of 0.25%. The company will charge a reduced fee of 0.12% for the first 12 months or until the initial $2.5 billion in assets is reached.
Fidelity has also set a sponsor fee of 0.25% but plans to waive this fee entirely until December 31, with no additional conditions.
21Shares and Bitwise have proposed sponsor fees of 0.21% and 0.2%, respectively. Both companies intend to waive their fees for the first six months or until the initial $500 million in assets is achieved.
Grayscale’s primary spot Ethereum ETF, converted from the Grayscale Ethereum Trust, carries a fee of 2.5%. Additionally, Grayscale’s mini ETH trust has a 0.25% fee with a 12-month waiver period, applicable up to $2 billion.
Franklin Templeton maintains a sponsor fee of 0.19%, with a waiver available for the first $10 billion in assets, extended until January 31, 2025.
VanEck upholds its 0.20% sponsor fee, coupled with a 12-month fee waiver from the launch date or until the initial $1.5 billion in assets is reached.
Invesco Galaxy retains its 0.25% sponsor fee, effective from the start. Notably, ProShares has not yet disclosed its sponsor fees or waiver terms.
Implications for the Industry and Analyst Predictions
Bloomberg ETF analyst Eric Balchunas remarked on the competitiveness of these fees, especially in contrast to Grayscale’s higher fee structure. Balchunas raised concerns about whether the new ETFs will attract substantial inflows compared to those potentially stemming from Grayscale’s converted ETF.
Regulatory Progress and Launch Updates
These recent filings mark a significant step towards regulatory approval. On May 23, the SEC approved proposed rule changes for spot ETH ETFs, enabling exchanges to list and trade these funds. However, this endorsement does not grant asset managers the final authorization required to issue the ETFs.
Industry experts anticipate that the final approvals will be granted next week, with trading expected to begin on July 23.