Bitrabo Editorial
With the deadline approaching for the launch of Ethereum ETFs, asset management firms have disclosed their management fees, hinting at the imminent approval of applications by the US Securities and Exchange Commission (SEC).
BlackRock’s Pricing Strategy
BlackRock filed an amendment to its S-1 registration statement, stating a 0.25% management fee for its spot Ethereum ETF, ETHA. The fee will accumulate daily at an annualized rate of 0.25% of the fund’s net asset value and will be payable at least every three months in US dollars, in-kind, or a mix of both. BlackRock may also consider waiving all or part of the fee for specific periods, reducing it to 0.12% during the ETF’s initial launch period until it operates for 12 months or reaches $2.5 billion in net assets, whichever comes first.
Employing a similar fee-cutting approach as with its IBIT Bitcoin ETF, BlackRock aims to attract significant inflows, evident in the approaching $20 billion in assets under management after seven months of trading.
Franklin Templeton Leads with the Lowest Fee
Franklin Templeton’s spot Ethereum ETF will feature the lowest fee at 0.19%, while Bitwise and VanEck set theirs at 0.20%. The 21Shares Core Ethereum ETF will have a 0.21% fee, and both Fidelity and Invesco Galaxy will match BlackRock’s 0.25% fee.
Notably, five issuers plan to waive their fees initially under specific conditions. For instance, VanEck will waive the fee for the first 12 months or until the ETF reaches $1.5 billion in net assets.
Grayscale has introduced the Grayscale Ethereum Mini Trust, offering a competitive fee of 0.25%, in alignment with BlackRock’s ETF fee structure. Moreover, 10% of the spot Ethereum ETF’s assets will fund the Ethereum Mini Trust, providing $1 billion in seed funding.
The expected capital inflows into Ethereum ETFs are likely to have a positive impact on ETH’s price and the broader cryptocurrency market, as historical data suggests that fresh capital from ETFs boosted the crypto market cap by 46% in 2024. Analysts foresee a similar trend with Ethereum ETFs strengthening Ether’s price and attracting more capital into the crypto market in the second half of the year.
Currently, ETH is trading at $3,460, maintaining a sideways movement within a 0.6% decrease in the last 24 hours. Despite this minor dip, the second-largest cryptocurrency remains up by 8% over the past week.