The second-largest cryptocurrency on the market, Ethereum, is about to begin a new era with the official launch of its exchange-traded funds.
The Chicago Board Options Exchange, CBOE, has confirmed the listing of five Ethereum spot ETFs for July 23, 2024.
This simultaneous launch will include ether spot exchange-traded funds from some of the world's most prestigious financial firms, including Fidelity, VanEck, Franklin Templeton, Invesco, and 21Shares, but will speculate that the BlackRock, Bitwise and Proshares funds could also be launched on Tuesday 23rd.
According to experts, the SEC's decision to authorize the launch of all these spot ETFs on the same day seeks to ensure fair competition from the start, preventing any firm from gaining an initial advantage over the others.
From Bitcoin to Ethereum
The approval of Ethereum ETFs comes just six months after the successful launch of Bitcoin-based spot ETFs, which have revolutionized institutional and retail investors’ access to the cryptocurrency market. Now, with Ethereum following in Bitcoin’s footsteps, a new wave of investment is expected to open up in the crypto ecosystem.
On the other hand, what is capturing the attention of analysts and investors in the final approval of Ethereum-based ETFs are the aggressive fee strategies that fund issuers are adopting, in an attempt to capture market share and attract early investors to their investment vehicles.
In a similar move reminiscent of the fee war that erupted over Bitcoin ETFs, several investment firms have announced temporary fee waivers and highly competitive fee structures for their ether spot funds.
Grayscale lowers its fee for the Ethereum Mini Trust
Noelle Acheson, a partner at Triple Crown Digital and a CoinDesk researcher, noted on her X account that Grayscale Investments has reduced the commission fee for its Ethereum mini ETF to 0,15%. In addition, the issuing firm announced a waiver of its commission fees for the first $2.000 billion or the first 6 months of the fund, Acheson said.
Grayscale is one of the most prominent and established players in the cryptocurrency market, so its recent adjustments represent a significant milestone in incentivizing institutional investment.
With this bold move of reducing the management fee of its Ethereum Mini Trust to 0,15%, Grayscale has turned its fund into the cheapest Ethereum ETF on the market.
Other ETF issuers have not been left behind in this race to offer the most attractive conditions for Ether exchange-traded funds. As reported by this media, Fidelity has set its fee at 0,25%, but will waive it until the end of 2024. Franklin Templeton will go even further, waiving its fee until January 31, 2025 on the first $10.000 billion of assets in the fund. VanEck, for its part, will not charge fees during the first year of operation for the first $1.500 billion invested.
21Shares has also opted for a similar strategy, setting a 0,21% fee for its spot fund, but waiving that fee for six months or until the first $500 million in assets is reached.
These aggressive pricing strategies reflect the intense competition in the market and the importance that firms are placing on capturing a significant share of what is expected to be a multi-billion dollar market in the first few months.
The launch of Ethereum spot ETFs represents a significant step in the maturation of the cryptocurrency market. By offering exposure to ether through a regulated, publicly traded investment vehicle, a new wave of institutional and retail investors are expected to enter the crypto market.
