As the July 23 deadline for the launch of the ethereum ETF (exchange-traded fund) spot market approaches, asset management firms have revealed their management fees, indicating the imminent approval of the applications by the United States Securities and Exchange Commission (SEC).
BlackRock's strategy to reduce fees
According to BlackRock's amended S-1 registration statement filed Wednesday, the asset management giant will charge a fee of 0.25%. Management Commission for its ethereum spot ETF ETHA.
The fee will accrue daily at an annualized rate of 0.25% of the fund's net asset value and will be paid at least quarterly in US dollars, in kind, or a combination of both.
BlackRock has also announced its intention to potentially waive all or part of the fee during certain periods, with a tariff reduction at 0.12% during the initial launch period of the ETF, which will remain in effect until the ETF has been in operation for 12 months or has accumulated $2.5 billion in net assets, whichever occurs first.
With the same fee-cutting strategy for its ETHA ETF in place for the first 12 months of trading, BlackRock is likely to see the most inflows, as it did with its IBIT bitcoin ETF, which is approaching $20 billion in assets under management (AuM) after seven months of trading.
Franklin Templeton offers the lowest rate
Franklin Templeton’s ethereum spot ETF will have the lowest fee, at 0.19%, while Bitwise and VanEck have set their fees at 0.20%. 21Shares’ ethereum Core ETF will charge 0.21%, and both Fidelity and Invesco Galaxy will match BlackRock’s fee of 0.25%.
Notably, five issuers, including Bitwise, Fidelity, Franklin Templeton, 21Shares, and VanEck, plan to waive their fees initially, and each issuer will have specific conditions for the exemption periodFor example, VanEck's fee will be waived for the first 12 months or until the ETF reaches $1.5 billion in net assets, as seen in the image below.
Lastly, Grayscale has announced the creation of the Grayscale ethereum Mini Trust, which offers a more competitive fee of 0.25%, aligned with the fee structure of BlackRock’s ETF.
Grayscale also revealed that 10% of the assets in its ethereum spot ETF will be used to establish the ethereum Mini Trust, which will provide $1 billion in Seed foundation.
ETFs will boost eth price growth
The expected inflows into ethereum ETFs will likely have a positive impact on the price of eth and the broader cryptocurrency market, as historical data shows. crypto/2024/07/17/ethereum-etfs/” target=”_blank” rel=”noopener nofollow”>data A study compiled by K33 Research shows that the flow of new capital into bitcoin through ETFs increased the cryptocurrency market capitalization by 46% in 2024.
Vettle Lunde, a senior analyst at K33, anticipates a similar trend with ethereum, suggesting that ETFs could strengthen the price of Ether in the second half of the year and facilitate the entry of marginalized capital into the cryptocurrency market.
Meanwhile, eth is trading at $3,460, showing a sideways movement on the 24-hour time frame with a 0.6% decline from Wednesday’s price. However, the second-largest cryptocurrency on the market is still up 8% over the past week.
Featured image of DALL-E, chart from TradingView.com
