Grayscale Reduces Planned Fees for ETH Fund, Lower Than Peers

July 20, 2024 - Grayscale Investments announced a 40% reduction in planned fees for its spot Ethereum ETF, which now costs 0.15%, lower than competitors. The adjustment comes as the battle for assets is about to begin and is intended to enhance its market competitiveness.

Initially, Grayscale's fee was 0.25%, comparable to similar products from BlackRock, Fidelity and others, but higher than competing funds such as Franklin Templeton (0.19%), VanEck (0.20%), Bitwise (0.20%) and 21Shares (0.21%). Grayscale's Ethereum Trust (ETHE), which manages about $10 billion in assets, will still maintain a 2.5% fee.

Analyst Scott Johnsson had questioned Grayscale's initial fees, but after the fee adjustment, he believes the decision "puts more pressure on BlackRock and others" to re-examine their product pricing.

Industry experts point out that fund fees are only one factor that investors consider when choosing ETFs, and liquidity and the issuer's brand are equally important. It is expected that the competition for assets in US spot ETH funds will be very fierce, but it may only account for a small part of the net inflow of US$16.7 billion in US spot BTC products since January.