Grayscale lowers planned fee for ETH fund, undercutting peers

The crypto asset manager lowered its planned fee from 0.25% to 0.15%, undercutting its competitors

July 19, 2024 08:51 am

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The planned fee for Grayscale Investments’ spot ether ETF was initially on the higher end when compared to competitors.

Then, the firm cut it by 40% — undercutting its peers — as a race for assets is set to begin in the coming days.

The intended sponsor fee for the Grayscale Ethereum Mini Trust (ETH) is now 0.15%, according to a disclosure filed late Thursday — down from the 0.25% fee it floated in a filing the day prior.

The original 0.25% fee was in line with similar offerings by BlackRock and Fidelity, as well as a proposed fund by Invesco and Galaxy. But the price point was higher than competing funds by Franklin Templeton (0.19%), VanEck (0.20%), Bitwise (0.20%) and 21Shares (0.21%).

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Grayscale is set to convert its Ethereum Trust (ETHE) — with about $10 billion in assets under management — to an ETF. Its fee for that product is set to remain at 2.5%.

The firm designed its Mini Ethereum Trust so that 10% of ETHE’s ether holdings go into the cheaper product.

Some analysts had questioned Grayscale’s original planned 0.25% fee for the Mini Ethereum Trust. Scott Johnsson, a general partner at Van Buren Capital, said in a post the firm “might have screwed themselves.”

But the firm has “wised up,” Johnsson said in an X post late Thursday. Moving the fee to 0.15% “puts a lot more pressure on BlackRock and others to market their product out of the gate,” he added.

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A Grayscale spokesperson did not immediately return a request for comment on the fee change.

Industry watchers have noted that a fund’s fee is just one factor investors consider when choosing an ETF. Others include the product’s liquidity, as well as the brand of the issuer, among others.

Segment observers expect a fierce fight for assets in the US spot ETH fund category. Still, many have said it will likely represent only a fraction of the roughly $16.7 billion of net inflows that have entered US spot BTC offerings since those launched in January.

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