Spot Ethereum exchange-traded funds (ETFs) could debut any day now, with fees being a critical last hurdle for prospective issuers. In a strategic move, investment management firm VanEck announced it will waive fees for its Ethereum ETF until 2025 or until the fund hits $1.5 billion in assets, whichever comes first.
Once either milestone is reached, VanEck’s ETF will charge a 0.20% fee. Matthew Sigel, VanEck’s head of digital assets research, highlighted the firm’s bold strategy on X (formerly Twitter). “VanEck aims to be a leader on crypto ETF fees even if it means we lose money at the outset,” Sigel stated. “The plan is to make it up on volume; in this case, decentralized finance volume.”
Sigel believes that ETH ETFs could spark renewed interest in Ethereum, boosting network activity and, consequently, the price of Ether. This would benefit VanEck’s holdings. He hinted at potential interest in Ethereum DeFi projects such as Curve or Aave.
This approach mirrors VanEck’s strategy for its spot Bitcoin ETF, which also waives fees until reaching $1.5 billion in assets or March 31, 2025. To date, the Bitcoin ETF has accrued $614 million, making it the sixth-largest spot Bitcoin ETF.
Ethereum ETF Fees prospective Issuers
Out of nine prospective issuers, only VanEck and Franklin Templeton have disclosed their Ethereum ETF fees. Franklin Templeton will offer a 0.19% fee, the same as for its Bitcoin ETF. According to Bloomberg Intelligence ETF analyst Eric Balchunas, issuers typically disclose fees late in the launch process. Many are waiting for BlackRock to set the benchmark.
“What BlackRock is going to charge is probably the single most important missing variable outside of the exact launch date,” Balchunas posted on X. He noted that VanEck and Franklin Templeton’s aggressive fee strategies could pressure BlackRock to offer fees below 0.30%. Balchunas added,
“Ethereum ETFs seem poised to have fees as low or even lower than Bitcoin ETFs.”
A unique challenge for Ethereum ETFs is that investors cannot stake their holdings through these funds to earn a 3% yield, unlike through exchanges and decentralized platforms. Adam Morgan McCarthy, an analyst at Kaiko Research, questioned the appeal, stating, “Even paying 0.20% without the staking element seems like a nonstarter to me.”
As the launch of Ethereum ETFs approaches, the fee war among issuers intensifies, with potential implications for the future of crypto investment.