Key Points:
Spot Ethereum ETFs are set to launch soon, with fees becoming crucial for prospective issuers. VanEck plans to waive its Ethereum ETF fee until 2025 or $1.5 billion in assets, aiming to lead on crypto ETF affordability.
VanEck's fee strategy mirrors its successful Bitcoin ETF approach, which has already amassed $614 million in assets. Franklin Templeton also joins the fray with a competitive 0.19% fee for its Ethereum ETF.
Nine issuers are in contention, awaiting BlackRock's fee disclosure, which will likely set a benchmark. The competitive fee landscape suggests spot Ethereum ETFs could offer lower costs than Bitcoin equivalents despite the absence of staking benefits.
Spot Ethereum ETFs may start trading any day now.
Would-be issuers hammer out fee structures; on Thursday, VanEck announced—hitting the price sheet as one of the larger investment management firms—that it would waive its fee for its spot Ethereum ETFs through 2025, or until the fund reaches $1.5 billion in assets, whichever comes first. After that, a 0.20% fee will kick in.
VanEck's head of digital assets research announced in a post on X: "VanEck aims to be a leader on crypto ETF fees even if it means we lose money at the outset." He said that has been the strategy—to make money from the increased volume in decentralized finance.
He says that if the spot Ethereum ETFs drives renewed interest in the asset, elevated network activity would boost the price of ether and benefit VanEck's holdings. He also mentioned possible bets on Ethereum DeFi projects like Curve or Aave.
Spot Ethereum ETFs Launch Imminent Amid Fee Competition
This fee-waiving strategy is common to what VanEck has in place for its spot Bitcoin ETF, which only begins charging fees when it hits $1.5 billion on March 31, 2025. To date, the Bitcoin ETF has gathered $614 million, making it the sixth-biggest spot Bitcoin ETF.
Only two of the nine would-be issuers—VanEck and Franklin Templeton—have revealed their Ethereum ETF fees. Franklin Templeton charges 0.19%, the same price as its Bitcoin ETF.
Read more: VanEck Bitcoin ETF Now Opens Opportunities for Investors on Major Australian Exchange.
Fee Strategies and Market Dynamics
According to Bloomberg Intelligence ETF analyst Eric Balchunas, firms are holding off on announcing their fees until they hear BlackRock's fee announcement. "What BlackRock is going to charge is probably the single most important missing variable outside of the exact launch date," Balchunas said in a post on X. He added that already VanEck and Franklin Templeton have set the table regarding low fees, which puts BlackRock under further pressure to offer fees below 0.30%.
Balchunas says Ethereum ETFs "can be cheaper than Bitcoin ETFs." However, he says investors have staked their Ether to earn a 3% yield. An element Ether ETFs won't replicate, so it makes little sense to pay the ETF fees, thinks Adam Morgan McCarthy of Kaiko Research: "Even paying 0.20% without the staking element seems like a nonstarter to me."
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