Spot Ethereum ETF Applicants Submit S-1 Amendments to SEC
Fee Waivers and Sponsor Fees Revealed
Several spot Ethereum (ETH) ETF applicants submitted S-1 amendments detailing sponsor fees and waiver details to the Securities and Exchange Commission (SEC) on July 17, as they prepare for a potential trading launch next week.
Fee Structure and Waivers
Almost all of the issuers have detailed fees and sponsor fee waiver terms in the latest filings.
BlackRock set a 0.25% sponsor fee and said it would only charge a 0.12% fee for the first 12 months or up to the initial $2.5 billion. Meanwhile, Fidelity set the same 0.25% fee and said it would waive the entire sponsor’s fee until December 31 without any other conditions.
21Shares and Bitwise added a 0.21% and 0.2% fee, respectively, which they will waive entirely for the first six months or up to the first $500 million.
Grayscale added a 2.5% fee for its main spot Ethereum ETF, converted from Grayscale Ethereum Trust. It added a 0.25% fee and a 12-month waiver to its mini ETH trust, which is valid for up to $2.0 billion.
Franklin Templeton reasserted its 0.19% fee and decision to waive the fee for the first $10 billion in assets. The firm added that the waiver period will last until January 31, 2025.
VanEck similarly reasserted its 0.20% fee and said its fee waiver period would last 12 months from launch or up to the first $1.5 billion. Invesco Galaxy also reasserted its 0.25% fee and a starting fee of 0.25%.
ProShares has not submitted fee or waiver data.
Launch Pending
Bloomberg ETF analyst Eric Balchunas commented on the fees, questioning whether each fund can generate significant inflows against funds unlocked from Grayscale’s converted ETF.
“Do these newborns have enough strength to offset those outflows a la BTC. Anyway, short story is [Grayscale’s] 2.5% fee made path to a decent net flow number a little harder. We’ll see.”
Final Steps Toward Approval
The latest additions represent one of the final steps toward approval.
The SEC approved proposed rule changes for spot ETH ETFs on May 23. The changes permit exchanges to list and trade the funds but do not give asset managers the final green light needed to issue them.
According to industry insiders, the funds are expected to secure the final approvals next week and will begin trading on July 23.
Conclusion
The spot Ethereum ETF applicants have submitted their S-1 amendments, revealing the fees and waiver details for the funds. The issuers have set their fees and waiver terms, with some offering more generous terms than others. The funds are expected to secure final approvals next week and begin trading on July 23.
FAQs
Q: What are the fees for the spot Ethereum ETF applicants?
A: The fees vary among the issuers, ranging from 0.12% to 2.5%. Some issuers, such as Fidelity and 21Shares, have waived their fees for the first six months or up to the first $500 million.
Q: What is the purpose of the fee waivers?
A: The fee waivers are intended to incentivize investors to invest in the funds, especially during the initial launch period. The waivers can help the funds attract more assets and generate more revenue.
Q: When are the spot Ethereum ETFs expected to launch?
A: The funds are expected to secure final approvals next week and begin trading on July 23.
Q: What is the significance of the SEC’s approval of proposed rule changes for spot ETH ETFs?
A: The SEC’s approval of the proposed rule changes permits exchanges to list and trade the funds, but does not give asset managers the final green light needed to issue them. The approval is a significant step toward the launch of the funds.
Q: Who is Bloomberg ETF analyst Eric Balchunas?
A: Eric Balchunas is a Bloomberg ETF analyst who commented on the fees and waiver details for the spot Ethereum ETF applicants. He questioned whether each fund can generate significant inflows against funds unlocked from Grayscale’s converted ETF.
