Ethereum ETF Fee Race Heats Up as Launch Date Approaches

TLDR

• Invesco and Galaxy set management fees for their Invesco Galaxy Ethereum ETF (QETH) at 0.25%
• This fee is slightly higher than VanEck’s 0.20% and Franklin Templeton’s 0.19%
• The competition among ETF issuers is driving down fees for investors
• Eight issuers are looking to launch Ethereum ETFs, with fees expected to be between 0.19% and 0.30%
• Bitwise has introduced a 6-month fee waiver until their Trust’s assets reach $500 million
• Analysts predict Ethereum ETFs could begin trading as soon as this month, with some suggesting July 15 as a potential launch date

As the anticipated launch of spot Ethereum exchange-traded funds (ETFs) draws near, a competitive landscape is emerging among asset managers vying for investor attention.

The latest development in this race came on July 9, when Invesco and Galaxy set the management fee for their Invesco Galaxy Ethereum ETF (QETH) at 0.25% in an amended filing to United States regulators.

This move by Invesco and Galaxy is part of a broader trend of ETF sponsors revealing their fee structures ahead of the expected rollout of spot Ether funds.

The 0.25% fee positions QETH slightly higher than some of its competitors. VanEck, for instance, disclosed plans to charge 0.20%, while Franklin Templeton set its fee at an even lower 0.19% in their respective S-1 registrations.

The competition among these fund managers is already proving beneficial for potential investors. All of the proposed fees are significantly lower than those charged by Grayscale’s Ethereum Trust (ETHE), a closed-end fund launched in 2017 that currently charges a 1.5% management fee.

Grayscale plans to launch its own spot Ethereum ETF but has not yet revealed its planned fee structure.

The fee race is reminiscent of what occurred in the Bitcoin ETF market earlier this year. When U.S. regulators approved the listing of Bitcoin ETFs in January, competition among fund managers led to fee cuts and temporary waivers, ultimately benefiting investors.

Currently, eight issuers are looking to launch Ethereum ETFs, with most expected to set their fees between 0.19% and 0.30%.

This competitive pricing strategy is crucial for differentiating products and attracting investor interest. Bitwise has taken an aggressive approach by introducing a 6-month fee waiver until their Trust’s assets reach $500 million, further intensifying the competition.

While the exact launch date for these ETFs remains uncertain, industry analysts are optimistic about a near-term approval. Some experts, including Nate Geraci, host of ETF Prime, suggest that next week could be the most likely timeframe for the rollout. July 15 has been highlighted by some analysts as a potential listing date for these ETFs.

SEC Chairman Gary Gensler has indicated a favorable timeline, stating that he expects Spot Ethereum ETF approvals “over this summer.”

This statement, coupled with the recent wave of S-1 amendments from all eight issuers, has heightened market anticipation for the SEC’s decisions.

It’s worth noting that none of the proposed spot crypto ETFs feature staking capabilities. Resistance from the U.S. Securities and Exchange Commission prompted several top fund sponsors, including Ark Investments Management and Fidelity Investments, to drop staking plans from their proposed spot ETH ETFs.

The imminent launch of Ethereum ETFs represents a significant milestone in the integration of cryptocurrencies into traditional financial markets.

It follows the successful introduction of Bitcoin ETFs and precedes potential future crypto-based ETFs. On June 8, the Chicago Board Options Exchange (CBOE) filed applications to list VanEck and 21Shares’ proposed spot Solana ETFs, with a decision expected around March 2025.

As the countdown to potential approval continues, all eyes are on the SEC and the competing fund managers.