There may be a fee war for Ethereum exchange-traded funds (ETFs) in the near future as issuers try to entice investors by driving down prices.
Applicants are frantically cutting expenses to entice investors in their spot Ethereum exchange-traded funds (ETFs), starting a race to the bottom.
Because issuers in the ETF sector often lower their cost ratios in an effort to attract inflows, experts say that fee wars are commonplace. When the SEC approved spot Bitcoin ETFs in January, the crypto community saw this process firsthand.
Eric Balchunas, an ETF analyst for Bloomberg, made the observation that the industry has seen the “first volley in the ETH ETF fee war.” This followed Franklin Templeton’s May 31st modified application submission to the SEC, in which the firm suggested a spot Ethereum ETF and included a fee of 0.19%. The business also said that for the first half of the year, it would not charge for the first $10 billion worth of assets.
Payable in US dollars, in-kind, or a mix of the two, the Sponsor’s Fee accrues daily at an annualized rate equal to 0.19% of the Fund’s net asset value and is due at least quarterly in arrears. The filing noted that the Sponsor has the right to waive all or part of the Sponsor’s Fee for certain periods of time, at its sole discretion.
Because of this, some are speculating that an application “fee war” may break out in the Ethereum ETF market. The “most fascinating cost to observe” according to ETF Store President Nate Geraci would be Grayscale’s ETH mini-trust fee. The fact that the investing firm’s Bitcoin fund lost a lot of money because of its exorbitant fees makes Geraci’s opinion understandable.
“Will they go for the jugular or something else entirely? Regardless, Geraci emphasized that spot Ethereum ETFs would likely trade at a price similar to spot Bitcoin ETFs.
Even while everyone is talking about the upcoming fee battles, additional ETH ETF candidates have revised their SEC filings. The biggest change was with the 21Shares app, which got rid of all reference to Ark Invest. “21Shares Core Ethereum ETF” is the new name of the exchange-traded fund that was formerly known as the “Ark 21Shares Ethereum ETF.”
Reportedly, Ark Invest responded to the shift by saying it is looking for efficient methods to provide its investors access to Ethereum and believes in its potential.
“ARK is confident in Ethereum’s revolutionary potential and the blockchain’s long-term worth, but the company has decided not to pursue an Ethereum ETF at this time. In order to ensure that our investors get the full advantages of this cutting-edge technology, we will keep looking for efficient methods to do so,” ARK said.
Also Read: The president turned down Congress’s crypto custody bill and SAB 121 was strongly protected
