Grayscale, one of the issuers of the upcoming ethereum exchange-traded funds (ETFs), has reduced the management fee for its Mini Trust to 0.15% from 0.25%, according to a July 18 filing.
The signature x.com/Grayscale/status/1814049035017503106″>fixed:
“Grayscale Investments has updated its registration statement for the Grayscale ethereum Mini Trust to reflect a 0.15% management fee. Additionally, we are reducing the fee to 0% for the first six months, applicable up to a maximum of $2 billion in assets under management (AUM).”
This move positions Grayscale’s ethereum ETFs as both the cheapest and most expensive. The Grayscale ethereum Trust (ETHE), which will become an ETF, maintains a 2.5% fee structure, while the Mini Trust would attract the cheapest fee on the market.
Market analysts previously predicted that high ETHE fees could drive investors to cheaper alternatives from rivals such as BlackRock, Fidelity Investments, VanEck, Bitwise and Franklin Templeton, with fees between 0.19% and 0.25%.
It is worth noting that a similar situation occurred with spot bitcoin ETFs. Grayscale’s bitcoin Trust has seen over $18 billion in outflows since its conversion into an ETF in January, with investors flocking to cheaper ETFs from BlackRock and others.
To prevent this from happening again, Grayscale is reallocating 10% of the $10 billion ETHE to fund its Mini Trust. And by reducing the Mini Trust fees, Grayscale is offering the most competitive rates.
Market observers believe that this move would moderate some of the potential outflows of ETHE. Cryptocurrency analyst Karl x.com/karl_0x/status/1814047971958505886?t=NKLc1t4Mvz5y6yRQ37Ao2A&s=19″>saying:
“Grayscale reduced eth fees to 0.15%. It is now the most competitive ETF from a fee perspective, which will likely prevent leakage (of assets under management) from Grayscale and reduce ETHE outflows. There are rumors that converting ETHE to eth is tax-free, which would be even more optimistic.”
Similarly, Nate Geraci, president of ETF Store, highlighted the importance of this move, stating that it was a bold strategy given Grayscale's pivotal role in launching cryptocurrency ETFs.
He x.com/NateGeraci/status/1814057437827358953″>aggregate:
“Grayscale paved the regulatory path for btc and eth spot ETFs. Period. There’s no reason not to leverage that and take a leadership position in how they approach competition in the crypto spot ETF category.”
