KEY POINTS
- Grayscale's $BTC ETF didn't find much popularity among retailers, but its mini $ETH ETF may finally shine
- An analyst said BlackRock will need 'a big push' if it wants to catch up to Grayscale's mini ETF
- Fidelity's Ethereum ETF trumps all others in fee waivers – 'unlimited' through the end of the year
The applicants for a spot Ethereum ($ETH) exchange-traded funds (ETFs) have filed amended filings to reflect the management fees they will charge, and while the fee war is a close fight for most of the issuers, one has stood out among the rest with the lowest offering that could suggest which Ether ETF will be a popular choice in the market.
Grayscale's mini $ETH ETF in the spotlight
Among the nine applying issuers, Grayscale's Ethereum Mini Trust ($ETH) fee of 0.15% is the lowest, marking a stark contrast to its Grayscale Ethereum Trust ($ETHE) fee of 2.50%, as per a chart posted by senior Bloomberg ETF analyst James Seyffart.
UPDATED Table of Ethereum ETFs and their fees that are set to launch next week. Grayscale's $ETH will now be the lowest cost ETF at 0.15% pic.twitter.com/UjoaHvHegH
— James Seyffart (@JSeyff) July 18, 2024
Prominent finance lawyer Scott Johnson previously commented on Grayscale's $ETH fee, saying investment giant BlackRock will "need a big push to catch up to the mini trust," considering the massive success the company had with its $BTC ETF, IBIT.
Other ETFs in close competition
The closest rival to Grayscale's $ETH is Franklin Templeton's $EZET, which has a 0.19% management fee. VanEck's $ETHV and Bitwise's $ETHW have the same 0.20% fee, while 21Shares' $CETH will charge 0.21%.
Fidelity's $FETH, iShares' $ETHA, and Invesco Galaxy's $QETH will charge 0.25%.
Fee waiver wars also on
Aside from the management fee wars, the Ether ETFs are also competing for who has the most attractive fee waiver during the early months of the funds' launch.
Grayscale's mini ETH ETF will waive $2 billion worth of management fees in the first six months of the funds going live, while iShares will waive $2.5 billion worth of fees in the first year of its ETF's journey.
Of nine applicants, two opted out of a fee waiver: $QETH and $ETHE. The most attractive waiver offering was snatched by Franklin Templeton, which will waive a staggering $10 billion in fees through Jan. 31, 2025, and Fidelity, which will waive off all fees through Dec. 31, 2024.
Bitcoin ETF fees comparison
BlackRock's IBIT had the most competitive management fee at 0.20% compared to other spot $BTC ETFs when the funds launched in January. Analysts have pointed to this cheaper fee as the reason for the ETF's popularity among retail investors.
$BTC ETF Fees have just been released.
— Thanefield Research (@ThanefieldRes) January 8, 2024
With extremely competitive management fees, some even below operating costs, issuers prioritize market share over short-term profits, likely in anticipation of a substantial influx of future demand for the $BTC market.
Additionally, with… pic.twitter.com/xDHRKxkbWv
Grayscale's GBTC, which charges 1.50%, was obviously not a great option for retailers, but has since started gaining traction among institutional investors.
When will Ether ETFs launch?
Analysts previously projected that the U.S. Securities and Exchange Commission (SEC) will fully approve spot $ETH ETFs early next week and have them go live on Tuesday, July 23.
The SEC did not provide an exact timeline for the full approval process, but Chair Gary Gensler previously said he expects the funds to go live this summer. Coincidentally – or not – next week is considered a week for the Bitcoin community due to the much-anticipated Bitcoin 2024 conference in Nashville.
