The ETH ETF war has begun as firms reveal fund fees
The race to launch Ether ETFs is intensifying, with major players like BlackRock, Fidelity, Invesco, and Bitwise finalizing their fee structures as they await SEC approval. These ETFs, set to hold Ether directly, are anticipated to debut soon, adding to the growing landscape of cryptocurrency investment options.
BlackRock and Fidelity have both proposed a 0.25% fee, with initial discounts to attract early investors. Meanwhile, 21Shares and Bitwise are offering slightly lower fees at 0.21% and 0.2%, respectively. Franklin Templeton stands out with the most competitive fee at 0.19%, whereas Grayscale has set a higher fee of 2.5% but plans to introduce a lower-cost alternative.
This fierce fee competition echoes the January launch of spot-Bitcoin ETFs, where issuers cut costs just before receiving approval. While the SEC has approved the listing proposal for these Ether ETFs, final authorization is still pending. Despite a 50% gain in Ether’s value this year, investor enthusiasm appears muted, likely due to the lack of staking rewards, which makes these ETFs less attractive.
Citigroup estimates that these funds could see inflows between $4.7 billion to $5.4 billion in their first six months. However, actual inflows might be lower since many investors have already gained crypto exposure through Bitcoin ETFs, which have accumulated around $16.6 billion in net inflows since January.
To secure SEC approval, asset managers have agreed to specific conditions, notably excluding staking from their ETFs. This decision addresses regulatory concerns about whether Ether should be classified as a security. The Canadian market offers a precedent where Bitcoin ETFs saw significant success, while Ether ETFs were less popular, possibly because Ether investors prefer engaging directly with the blockchain rather than through fund products.
As these new Ether ETFs prepare to enter the market, the ongoing fee competition and regulatory adjustments highlight the evolving landscape of cryptocurrency investments, offering more options for investors seeking exposure to digital assets.
