As a seasoned crypto investor with a keen interest in Ethereum (ETH) and exchange-traded funds (ETFs), I’ve been closely following the latest developments surrounding the potential launch of ETH ETFs on US exchanges. The recent announcement by industry insiders regarding a possible July 23rd go-live date has sparked renewed excitement among investors, with various issuers vying for our attention through attractive fee structures and discounts.
Insiders in the industry have announced that Ethereum ETFs will begin trading on US exchanges on July 23rd, as mentioned by the SEC. With this date approaching, ETF providers are now offering reduced fees to entice large inflows from investors at the launch. Franklin Templeton’s EZET fund is currently leading the way in this fee discount competition.
Franklin Templeton has granted a fee waiver on the EZET ETF’s management charge for the initial year, or until its assets under management reach $10 billion. Once this threshold is surpassed, the fee will remain the most economical among comparable ETFs at 0.19%. The EZET ETF is one of seven funds from Franklin Templeton that provide such discounts to investors.
As an analyst, I’ve examined the Securely Commission (SEC) approvals for nine Ethereum exchange-traded funds (ETFs). Among those approved, Grayscale and Invesco Digital have not disclosed any plans to reduce fees. ProShares, however, has yet to register with the SEC and hasn’t announced a launch date for its ETH ETF. The fee structure for ProShares will be unveiled once they initiate the registration process.
Among the vast majority of filers, nine out of ten submitted their final SEC S-1 applications, making necessary adjustments based on the regulatory body’s guidance. The documents contained information about potential fees and any offered discounts. A significant number of issuers established their fee rates between 0.20 and 0.25 percent. Grayscale, however, chose an unusually high management fee of 2.5%, opting not to provide any discounts for investors.
As a researcher studying Grayscale’s investment products, I can share that since 2017, Grayscale has provided exposure to Ethereum through an Over-The-Counter (OTC) fund called the Ethereum Trust Fund (ETHE). This fund operates under the same fee structure. Moving forward, Grayscale intends to convert this fund into a new regulated Exchange-Traded Fund (ETF) by the Securities and Exchange Commission (SEC). Additionally, Grayscale plans to introduce another Ethereum ETF, named the Mini Trust, which comes with a fee of 0.25%. However, for the initial year or until the fund reaches $2 billion in Assets Under Management (AUM), investors will enjoy discounted fees, reducing the expense ratio to 0.12%.
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2024-07-19 20:20