Ethereum EFF payment competition is heating up as the launch date approaches
TLDR
Invesco and Galaxy Set Management Fees for Invesco Galaxy Ethereum ETF (QETH) at 0.25%, slightly higher than VanEck's 0.20% and Franklin Templeton's 0.19% Fees up to 0.30% Bitwise has introduced a 6-month fee freeze until their trust assets reach $500 million, with analysts speculating that Ethereum ETFs could start trading as soon as this month. Launch date
As the launch of the Ethereum exchange-traded funds (ETFs) space approaches, a competitive landscape is emerging among asset managers vying for investors' attention.
The latest development in this competition came on July 9, when Invesco and Galaxy set the management fee for the Invesco Galaxy Ethereum ETF (QETH) at 0.25% in an updated filing with US regulators.
This move by Invesco and Galaxy is part of a broader trend of ETF sponsors unveiling their fee structures ahead of the expected launch of Ether funds.
The 0.25% fee makes QETH slightly higher than some of its competitors. For example, VanEyck announced plans to charge a fee of 0.20%, while Franklin Templeton has set a lower rate of 0.19% on its respective S-1 filings.
The competition between these fund managers is already proving beneficial for investors. All proposed fees are significantly lower than those paid by Greyscale's Ethereum Trust (ETHE), which Launched in 2017, the closed-end fund currently charges a management fee of 1.5%.
Grayscale plans to launch its own spot Ethereum ETF, but has yet to reveal its proposed fee structure.
The payment race is reminiscent of what happened 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 suspensions, ultimately benefiting investors.
Eight issuers are currently looking to launch Ethereum ETFs, most of which are expected to set their fees between 0.19% and 0.30%.
This competitive pricing strategy is critical to differentiate products and attract investor interest. Bitwise took an aggressive approach by introducing a 6-month payment freeze until their trust assets reached $500 million, making the competition even tougher.
While the exact launch date of these ETFs is uncertain, industry analysts are optimistic about the imminent approval. Some experts, including ETF Prime host Nate Geracchi, suggest that next week could be the most likely time for an exit. July 15 is seen by some analysts as a possible listing date for these ETFs.
SEC Chairman Gary Gensler said that he expects Spot Ethereum ETF approvals “this summer”, indicating an opportune time.
This announcement, coupled with recent S-1 filings by all eight issuers, has raised market anticipation for the SEC's rulings.
It should be noted that none of the proposed crypto ETFs feature deposit capabilities. Objections from the US Securities and Exchange Commission have prompted several top fund sponsors, including Arc Investment Management and Fidelity Investments, to drop key plans for ETH ETFs.
The recent launch of Ethereum ETFs marks a major milestone in the integration of cryptocurrencies into traditional financial markets.
It follows the successful introduction of Bitcoin ETFs and will be preceded by future crypto-based ETFs. On June 8, the Chicago Board Options Exchange (CBOE) filed an application to list VanEck and 21Shares' proposed Spot Solana ETF, with a decision expected around March 2025.
As the countdown to potential approval continues, all eyes are on the SEC and competing fund managers.
