The Ethereum ETF Fee War: Who Will Come Out on Top?
The Ethereum ETF market is heating up as several new funds are set to list next week, with issuers slashing fees to attract investors. According to Bloomberg ETF analyst James Seyffart, promotional discounts range from full waivers to 50% fee reductions, with offers lasting from six months to a year or until certain asset levels are reached.
Out of the ten proposed spot Ethereum ETFs, seven are cutting fees, with Grayscale Ethereum Trust (ETHE) and Invesco Galaxy Ethereum ETF opting out of the fee war. ProShares Ethereum ETF is also not expected to list next week due to lagging in the registration process.
Leading the charge in fee reductions is Franklin Templeton’s Franklin Ethereum ETF (EZET), which is waiving management fees for a full year or until reaching $10 billion in assets under management. Even after this period, their baseline fee is only 0.19%, the lowest among the ETFs.
Grayscale Ethereum Trust (ETHE) is maintaining its 2.5% fee but is launching a new product, Grayscale Ethereum Mini Trust, with a more competitive fee of 0.12% for the first year or until AUM hits $2 billion.
Nine asset managers are competing in the Ethereum ETF market, with fees becoming a battleground for attracting investors. The final list of fees will be revealed when registration statements are submitted to the SEC on Tuesday before trading begins.
The ETFs will be listed on major exchanges like Nasdaq, CBOE, and NYSE. Analysts predict that demand for Ethereum ETFs will be about 20% of Bitcoin ETFs due to Ether’s market capitalization being lower. Despite this, experts believe the ETFs will be successful, with inflows estimated to reach $4 billion in the first six months of trading. If predictions hold true, these ETFs could absorb 1% of all ETH in circulation by the end of the year.
