Ethereum
Grayscale Shocks Community With 10x Ethereum ETF Fees
Godfrey Benjamin
Despite lessons learned from Bitcoin ETF launch, Grayscale’s Ethereum ETF fees are 10x higher than its competitors
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Like all other Ethereum spot ETF depositors, Grayscale has revealed his sponsorship fee for the rule change he is proposing.
Grayscale doesn’t care about the outgoing stream
While this isn’t entirely shocking, given its history with spot Bitcoin ETFs, the investment asset management firm is charging a 2.5% fee. It’s worth noting that many potential issuers have kept their sponsorship fees below 0.25%. This makes Grayscale’s fees 10x higher than those of its competitors.
There is every reason to believe that the company has not learned the lessons of the enormous outputs than its GBTC The ETF has been making profits within six months of its launch. Bloomberg senior ETF analyst Eric Balchunas thinks Grayscale could be making a mistake. ETFStore president Nate Geraci agrees. Grayscale’s Ethereum Trust (ETHE), which it plans to convert into a spot Ethereum ETF, currently has as much as $10 billion in assets under management (AUM).
These analysts believe that the company’s latest announcement could lead ETHE to follow a similar trajectory to GBTC. If that happens, Grayscale could lose $5 billion or more to other players offering a more attractive fee structure.
Grayscale Competitors’ Ethereum Spot ETF Fee Structure
Franklin Templeton was the first Ethereum spot ETF filer to disclose its fees, capping them at 0.91%. Invesco Galaxy requested a unified sponsorship fee of 0.25% per annum for its Ethereum QETH ETF.
VanEck said it will waive ETF fees entirely for an indefinite period, until 2025 or until assets reach $1.5 billion, whichever comes first. After that, a 0.2% referral fee will apply to the Ethereum ETF. Similarly, Bitwise disclosed a six-month fee waiver until the trust’s assets reach $500 million.
The latest is 21 Shares, which charges a per-unit sponsorship fee equal to 0.21% of its Ethereum ETF. However, it plans to waive that fee for the first six months.
About the Author
Godfrey Benjamin
Godfrey Benjamin is an experienced crypto journalist whose main goal is to educate everyone around him about the prospects of Web 3.0. His love for crypto was born when, as a former banker, he discovered the clear advantages of decentralized money over traditional payments. With his extensive experience in covering various aspects of Web3, Godfrey’s articles have been featured on Blockchain.news, Cryptonews, and Coingape, among others.