Ethereum ETF Issuers Are Already Racing to Drop Fees

By Tarang Khaitan

The fee for VanEck’s proposed spot Ethereum ETF will be waived after launch until 2025 or when the fund’s assets under management (AUM) reach $1.5 billion mark—whichever comes first—according to an amended SEC Form S-1 filing.

When either of the aforementioned stipulations is fulfilled, the global asset manager will levy a 0.2% fee. Across its currently trading funds, which includes the VanEck Bitcoin Trust, the firm currently has $102 billion assets under its management.

VanEck is not the only asset manager trying to lure investors into the queue for its Ethereum ETF. Franklin Templeton announced that it would forgo its sponsor fee for six months or until its spot ETH fund reaches $10 billion, at which point it’ll start charging a 0.19% fee.

Notably, earlier this month, VanEck made a forecast that the price of ETH would reach $22,000 by 2030 and dubbed Ethereum “digital oil.” But there's still no word on when exactly trading will begin. Yesterday, during a Bloomberg Invest Summit, Securities and Exchange Commission (SEC) Chairman Gary Gensler commented that the approval process for U.S. spot Ethereum ETFs is going smoothly.

The SEC chair had previously stated that U.S. spot Ethereum ETFs will start trading sometime during the summer.

Interestingly, VanEck filed an 8-A form with the U.S. regulator yesterday. This led many to speculate that U.S. spot Ethereum ETFs are one week away, as previously Bitcoin spot ETFs started trading exactly one week after fund houses had submitted their 8-A form with the SEC.

Road to $15 billion

A report from Bitwise’s chief investment officer, Matt Hougan suggests that U.S. spot Ethereum ETFs could witness nearly $15 billion in net inflows in the first 18 months after trading begins.

Hougan goes on to state that his estimates could vary, as he has not factored in the negative impact of not having Ethereum staking in the spot ETFs. However, Hougan notes that it should not have any significant impact on the ETFs.

On that point, Bitwise’s competitor Grayscale disagrees. The firm updated the disclosure statement for its Grayscale Ethereum Trust last week to very explicitly spell out for investors that they are at a “competitive disadvantage”  buying shares instead of buying and staking Ethereum.

Meanwhile, the Bitwise also report suggests that there are multiple tailwinds for Ethereum due to increasing stablecoin supply, increased regulatory clarity, and the positive impact of Ethereum’s Dencun upgrade.

“Still, I think $15 billion in the next 18 months is a good starting point. My gut tells me we’ll do better than that; ETH is a compelling asset powering the world’s most versatile blockchain. But even $15 billion in net new demand will have a dramatic impact on the Ethereum market.” Hougan concluded in his report.

Interestingly, a report based on K33 Research indicated that Ethereum ETFs will likely see net inflows of $4 billion within five months of their launch.

Last week, Bitwise reported that Pentra Capital Management LP intends to invest $100 million when Bitwise’s spot Ethereum ETF starts trading.

Edited by Stacy Elliott.

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