Fidelity to fund its Ethereum ETF with $4.7 million, filing shows

The world's fourth-largest asset manager has promised to seed its upcoming ethereum ETF with $4.7 million ahead of its launch, according to a regulatory filing.

“The total income for the Trust from the sale of the seed baskets was $4,749,975.00,” it reads. Fidelity S-1 Registration Form for its “Fidelity ethereum Fund” presented on Friday.

Fidelity buys its first batch of ethereum

The profits were used to purchase eth on June 4, securing 1,250 eth at that time. They were purchased by FMR Capital, an affiliate of Fidelity, securing the asset manager 125,000 shares for $38 each.

When launching an ETF, asset managers fill it with funds to provide liquidity to its initial buyers, while demonstrating the sponsor's confidence in the fund. Upon launching its bitcoin ETF in January, Fidelity invested $20 million in its fund. Competitors like BlackRock and Bitwise: Some of their biggest competitors provided seeds worth $10 million and $200 million respectively.

Earlier this week, Bitwise's registration statement said it had seeded its ethereum ETF with $2.5 million and also revealed that Pantera Capital Management could be willing to buy $100 million worth of shares. Shortly after Fidelity, BlackRock revealed that it would fund his funds with $10 million, matching his initial investment in the bitcoin fund.

Although seed numbers are being revealed, Franklin Templeton is one of the only applicants so far to have revealed the management fee for its ethereum fund, indicating it would match its bitcoin product at 0.19%. This makes it the cheapest bitcoin or ethereum ETF yet, along with VanEck's. twitter.com/EricBalchunas/status/1804254007202103379″ data-wpel-link=”external” target=”_blank”>slightly higher at 0.2%.

Experts suspect that other providers will reveal their rates as the launch date approaches. Bloomberg ETF analyst Eric Balchunas recently called July 2 his best estimate of when the funds will go live.

“Everyone is probably waiting until the last minute and/or at BlackRock to reveal what they need to orbit,” Balchunas wrote on twitter on Friday.

How well do eth ETFs perform?

Analysts generally don't expect ethereum ETF flows to surpass those of bitcoin, but they do expect them to greatly outperform the average newly launched ETF product. Balchunas has previously predicted that the funds will attract 20% of the flows their bitcoin counterparts got (now up to $14.6 billion since January).

Others are more optimistic. K33 Research published a report this month calling for ETFs to take 28% of the returns on bitcoin products, equivalent to $4 billion over five months. In March, Standard Chartered said ethereum ETFs would attract $45 billion in inflows within a year.

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