21Shares has recently amended its S-1 registration statement for its upcoming Spot Ethereum ETF called the Core Ethereum Trust (CETH). The filing made on Wednesday, July 17th, reveals a sponsor fee of 0.21% of the Ethereum assets in the trust. This fee is higher than the one proposed by VanEck at 0.20%, which places 21Shares quite fairly in the market of Ethereum-based ETFs.
The update also describes a new fee waiver strategy that is aimed at attracting and retaining investors. The exemption applies for the first six months following the listing or until the Trust’s assets hit $500M. It follows the model used by companies such as Bitwise that has not specified its fees yet.
Through this, 21Shares seeks to minimize the costs for the early investors, thus promoting growth in the initial phase of the Trust’s operations.
Ethereum ETF Competitive Landscape
The decision to charge a fee of 0.21% positions 21Shares as one of the leaders in the race to launch Spot Ethereum ETFs. Other big names like Invesco Galaxy and BlackRock have also revealed similar fees at 0.25%. Franklin Templeton has however set its fees slightly lower at 0.19%. This competitive fee structure is important as firms fight for market share in the growing crypto ETF space.
More specifically, Grayscale and Bitwise are just some of the players who are adjusting their fees at 2.5% and 0.2% respectively. The low pricing and strategic waivers are signs of the changing strategies that firms are using to attract initial investment in the market.
Regulatory Progress and Market Anticipation
The SEC has recently been quite engaged in the consideration of the amendments and proposals regarding Ethereum ETFs, including the most recent 21Shares’ filing. This regulatory trend is paving the way for substantial growth of crypto-related financial products in the US market.
Bloomberg ETF analyst Eric Balchunas estimated that in the absence of any last-minute legal issues, these new ETFs could start trading as early as Tuesday, July 23.
Moreover, the SEC has recently approved many 19b-4 filings from different firms, which opens up a new chapter for digital assets investment. The approvals signify the SEC’s approval of the ETFs’ are compliant with the regulations governing such products.
Bitwise CIO Matt Hougan’s Analysis
In an attempt to contribute to the recent debates on the Ethereum ETF, Matt Hougan, Bitwise’s Chief Investment Officer has provided his thoughts about the effects of these new financial instruments. Hougan compared the situation with the previous Bitcoin ETF approval and claimed that the Ethereum ETF could send ETH prices through the roof.
Hougan believes that there might be some price swings in the early stages of the product. Concurrently, there could be a transfer of capital from other investment vehicles like the Grayscale Ethereum Trust but expects the market to remain positive in the long run.
“By year-end, I’m confident the new highs will be in. And if flows are stronger than many market commentators expect, the price could be much higher still,” Hougan stated, underlining his optimistic projection for Ethereum’s price trajectory following the ETF launch.
