TLDR
- 21Shares has set a management fee of 0.21% for its Ethereum ETF (CETH).
- The company plans to waive fees for up to 6 months or until the fund reaches $500 million in assets.
- Other issuers like VanEck and Franklin Templeton have also announced competitive fees.
- The SEC has requested final S-1 forms from ETF issuers, with potential launches on July 23.
- Analysts expect a fee war similar to what occurred with Bitcoin ETFs earlier this year.
Asset manager 21Shares has filed an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) for its spot Ethereum exchange-traded fund (ETF), revealing key details about its fee structure and launch strategy.
The filing, submitted on July 17, 2024, comes as the cryptocurrency industry eagerly anticipates the potential approval and launch of several Ethereum ETFs.
According to the filing, 21Shares has set the management fee for its 21Shares Core Ethereum ETF (CETH) at 0.21% of its net asset value.
However, in a move aimed at attracting early investors, the company plans to waive this fee entirely for up to six months after the fund’s listing or until it accumulates $500 million in assets under management, whichever comes first.
This competitive pricing strategy mirrors the approach taken by other ETF issuers in the rapidly evolving crypto ETF landscape. VanEck, for instance, previously announced a 0.20% management fee for its Ethereum ETF, with plans to waive the fee for up to one year or until the fund reaches $1.5 billion in assets. Franklin Templeton has set its fee even lower at 0.19%, while Invesco and Galaxy have opted for a slightly higher 0.25% fee.
The emerging fee war among Ethereum ETF issuers is reminiscent of the competition that unfolded earlier this year with the launch of spot Bitcoin ETFs. Analysts expect this trend to continue as issuers vie for market share in what could be a significant new investment vehicle for institutional and retail investors alike.
The SEC has reportedly called on Ethereum ETF issuers to submit their final S-1 forms by July 17, with a potential launch date set for July 23. This timeline has created a flurry of activity among asset managers, who are fine-tuning their offerings to appeal to investors.
Eric Balchunas, a Bloomberg ETF analyst, noted that the strategy of leaving fees out of initial filings was likely a tactic by asset managers to gauge the competitive landscape, particularly in relation to BlackRock’s offering.
Update: Nate's instincts were right, hearing SEC finally gotten back to issuers today, asking them to return FINAL S-1s on Wed (incl fees) and then request effectiveness on Monday after close for a TUESDAY 7/23 LAUNCH. This is provided no unforeseeable last min issues of course! https://t.co/D21FD9Qf94
— Eric Balchunas (@EricBalchunas) July 15, 2024
The fee disclosed by BlackRock, one of the world’s largest asset managers, is expected to be a key factor in shaping the overall competitive environment.
The potential approval and launch of Ethereum ETFs come at a time of growing institutional interest in cryptocurrencies.
Analysts predict that these new investment vehicles could attract up to $10 billion in inflows in the months following their launch, potentially driving Ethereum prices to new all-time highs by the end of the year.
The introduction of Ethereum ETFs is also fueling speculation about the potential approval of other cryptocurrency ETFs in the future. The Chicago Board Options Exchange has already filed applications for spot Solana ETFs, with a decision expected around March 2025.
As the July 23 launch date approaches, all eyes will be on the SEC and the ETF issuers as we prepare for launch.
Some analysts think the launch could drive up the ETH price to $5000 in the short-term with larger gains coming later in the year.
