BlackRock, a leading asset management firm, has announced a 0.25% annual fee for its soon-to-launch spot Ethereum exchange-traded fund (ETF). The fee will be accrued daily and payable quarterly in US dollars, in-kind assets, or a combination of both, as detailed in their recent S-1 registration statement filed on July 17.
Initial Reduced Fee and Fee Waivers
BlackRock’s spot Ether ETF will start trading with a reduced fee of 0.12%. This rate will be valid for either 12 months or until the fund reaches $2.5 billion in net assets, whichever comes first, with potential fee waivers at launch.
Competitors’ Fee Structures
Other issuers have also outlined their fee structures in amended S-1 registration forms. Franklin Templeton’s spot Ether ETF plans to charge the lowest fee at 0.19%, while Bitwise, VanEck, and the 21Shares Core Ethereum ETF have set their fees at 0.20% and 0.21%, respectively. Fidelity and Invesco Galaxy will match BlackRock with a 0.25% fee.
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Bitwise, Fidelity, Franklin Templeton, 21Shares, and VanEck intend to waive their fees at launch. VanEck will waive fees for 12 months or until it reaches $1.5 billion in net assets, and Bitwise will waive fees for six months or until it hits $0.5 billion in net assets. In contrast, Grayscale will maintain its fee for the spot Ether ETF at 2.5%, though its newly approved Grayscale Ethereum Mini Trust will offer a more competitive 0.25% fee.
Strategic Flexibility Amid Competition
Pending approval, these ETFs will be listed on major exchanges, including Nasdaq, the New York Stock Exchange, and the Chicago Board Options Exchange. This expansion will provide greater access to Ethereum investments for both institutional and retail investors.
BlackRock’s decision to introduce a 0.25% fee for its Ethereum ETF, with potential fee waivers, showcases strategic flexibility amid fierce market competition and evolving investor expectations. By offering a reduced initial fee and the possibility of waivers, BlackRock aims to attract investors and secure a strong position in the burgeoning market for cryptocurrency ETFs.
