BlackRock Sets 0.25% Fee for Spot Ethereum ETF as Issuers Update S-1 Filings

Highlights:

• BlackRock sets spot Ethereum ETF fee at 0.25%, with potential waivers.
• All ETF issuers disclose their fees: Templeton offers the lowest, 0.19%, and Grayscale charges the highest, 2.5%.
• Spot Ethereum ETFs are set to begin trading on July 23 with high inflows.

BlackRock, a leading asset management firm, has set the fee for its spot Ethereum (ETH) exchange-traded fund (ETF) at 0.25% ahead of a potential launch next week. In an amended S-1 registration statement filed on Wednesday, BlackRock announced that it could “waive all or a portion” of the fee for certain periods and plans to do so upon launch.

Finally iShares/BlackRock has there S-1 submitted. This is the last of the original crew. They are coming in with a 0.25% fee. Mostly expected. Now we just need some S-1's from the Grayscale ETH mini and Proshares filings. https://t.co/v27IaU1krq pic.twitter.com/7Q3NLCCNEO

— James Seyffart (@JSeyff) July 17, 2024

BlackRock also said its spot Ether ETF will commence trading with a discounted fee of 0.12%. This reduced rate will apply either for the first 12 months or until the fund reaches $2.5 billion in net assets, whichever happens sooner.

The firm stated:

“The Sponsor’s Fee is accrued daily at an annualized rate equal to 0.25% of the net asset value of the Trust and is payable at least quarterly in arrears in U.S. dollars or in-kind or any combination thereof. The Sponsor may, at its sole discretion and from time to time, waive all or a portion of the Sponsor’s Fee for stated periods of time.”

Fee Disclosures and Waivers in Amended S-1 Filings

Others have also disclosed their proposed fees and periods for fee waivers amidst a surge of amended S-1 registration filings.

ETF issuer 21Shares has set a 0.21% fee for its ETF. According to its amended S-1 registration statement filed on Wednesday, this fee will be waived for the first six months following the listing date or up to the first $500 million in assets, whichever occurs first. 

Bitwise also disclosed its fee on Wednesday, setting it at 0.20%, as stated in its amended filing. Previously, Bitwise indicated it would waive the sponsor fee for the initial six months on the first $500 million in assets.

Invesco Galaxy set its fee at 0.25%. VanEck’s fee was 0.20%, and Franklin Templeton established a 0.19% fee. On Wednesday, Fidelity also set its fee at 0.25% but announced it would waive the fee through the end of 2024. Franklin Templeton will waive its fee until January 31, 2025, on the first $10 billion of the fund’s assets. VanEck will waive its fee for one year after the fund is listed on the exchange for the first $1.5B.

Grayscale’s fee for the Grayscale Ethereum Trust is 2.5%, which is significantly higher than the fees set by other issuers. Additionally, 10% of Grayscale’s spot Ethereum ETF will be allocated to establish its Ethereum Mini Trust, with $1 billion in seed funding.

Okay everyone. Here are the details for the #Ethereum ETFs that we expect to launch next week. We are only missing details for Proshares's ETF. 7 of the 10 funds have fee waivers. pic.twitter.com/5v3QnHOeub

— James Seyffart (@JSeyff) July 17, 2024

Spot Ethereum ETFs Likely to Begin Trading July 23

Several sources stated that spot Ethereum ETFs are expected to commence trading on July 23. According to Bloomberg ETF analyst Eric Balchunas, the S-1s are anticipated to receive approval next Monday after the market closes. This approval will pave the way for the official trading launch of spot Ether ETFs on Tuesday, July 23rd.

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

Bitwise’s Matt Hougan speculated spot Ether ETFs could attract $15 billion in inflows within the first 18 months of trading. This amount is approximately equivalent to the inflows that spot Bitcoin ETFs have accumulated since their launch six months ago. If approved, Ethereum ETFs would be listed on the New York Stock Exchange, Nasdaq, and the Chicago Board Options Exchange.