EddieJayonCrypto

 19 Jul 24

tl;dr

As the July 23 deadline for launching the spot Ethereum ETF (exchange-traded fund) market approaches, asset management firms have disclosed their management fees. BlackRock's spot Ethereum ETF will have a 0.25% management fee, potentially reduced to 0.12% during the initial launch period. Franklin T...

BlackRock's spot Ethereum ETF (ETHA) to charge 0.25% management fee, potentially reducing to 0.12% during initial launch period
Franklin Templeton offers lowest fee for spot Ethereum ETF at 0.19%, while Bitwise and VanEck set fees at 0.20%
Grayscale introduces Ethereum Mini Trust with competitive 0.25% fee, with 10% of ETF assets funding the trust

As the July 23 deadline for launching the spot Ethereum ETF (exchange-traded fund) market approaches, asset management firms have disclosed their management fees. BlackRock's spot Ethereum ETF will have a 0.25% management fee, potentially reduced to 0.12% during the initial launch period. Franklin Templeton's ETF will offer the lowest fee at 0.19%, while Bitwise and VanEck will charge 0.20%. Grayscale has also announced the creation of the Grayscale Ethereum Mini Trust with a competitive fee of 0.25%. The expected inflows into Ethereum ETFs are anticipated to positively impact ETH's price and the broader cryptocurrency market. ETH is currently trading at $3,460, showing a sideways movement in the 24-hour time frame with a 0.6% decrease since Wednesday's price. As the July 23 deadline for launching the spot Ethereum ETF (exchange-traded fund) market approaches, asset management firms have disclosed their management fees, signaling the imminent approval of applications by the US Securities and Exchange Commission (SEC).

BLACKROCK'S FEE CUT STRATEGY
According to BlackRock's amended S-1 registration statement filed on Wednesday, the asset management giant will charge a 0.25% management fee for its spot Ethereum ETF ETHA. The fee will be accrued daily at an annualized rate of 0.25% of the fund's net asset value and payable at least every three months in US dollars, in-kind, or a combination of both. BlackRock has also announced its intention to potentially waive all or a portion of the fee for certain periods, with a fee reduction to 0.12% during the ETF's initial launch period, 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-cut strategy for its ETHA ETF 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 LOWEST FEE
Franklin Templeton's spot Ethereum ETF will have the lowest fee at 0.19%, while Bitwise and VanEck have set their fees at 0.20%. The 21Shares Core Ethereum 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, with each issuer having specific conditions for the waiver period. For 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, offering a more competitive fee of 0.25%, aligning with the fee structure of BlackRock's ETF. Grayscale also revealed that 10% of the assets from its spot Ethereum ETF will be used to establish the Ethereum Mini Trust, providing $1 billion in seed funding.

ETFS TO DRIVE PRICE SURGE FOR ETH
The expected inflows into Ethereum ETFs will most likely positively impact ETH's price and the broader cryptocurrency market, as historical data compiled by K33 Research shows that fresh capital flowing into Bitcoin via ETFs increased the crypto market cap by 46% in 2024. Vettle Lunde, senior analyst at K33, anticipates a similar trend with Ethereum, suggesting that the ETFs could strengthen Ether's price in the second half of the year and facilitate the entry of sidelined capital into the crypto market. Meanwhile, ETH is trading at $3,460, showing a sideways movement in the 24-hour time frame with a 0.6% decrease since Wednesday's price. However, the second-largest cryptocurrency on the market is still up 8% over the past week.

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