SEC Approves Form 19b-4 for the Grayscale Mini Ethereum ETF and ProShares Ethereum ETF
Grayscale’s main spot Ethereum ETF has high fees, while the Grayscale Mini Ethereum ETF could offer significantly lower fees.
- Analysts estimate the launch of spot Ethereum ETFs to be on July 23.
- Waiving fees can have positive effects, but it doesn’t always result in higher assets under management (AUM).
- Kaiko estimates that the spot ETH ETF could positively impact Ethereum more than the spot BTC ETF did for Bitcoin.
The U.S. Securities and Exchange Commission (SEC) has approved the Grayscale Mini exchange-traded fund (ETF) and ProShares Ethereum ETF, which are expected to trade alongside other spot ETH ETFs anticipated to be approved next week.
The Grayscale Mini Ethereum ETF (ETH) will be seeded with 10% of the Grayscale Ethereum Trust’s (ETHE) $10 billion assets. The firm also plans to convert ETHE into a spot ETF.
The approval was for the Form 19b-4 filing, permitting listing on the NYSE Arca platform. However, issuers must wait for final comments on their respective S-1 filings.
The SEC approved 19b-4 filings for other spot Ethereum ETF applications in May, but final comments on the S-1 filings are still pending. ProShares filed its spot Ethereum ETF three weeks later than other applicants and is not expected to list next week.
Spot Ethereum ETF Fees
The Grayscale Ethereum Mini Trust is expected to charge a 0.25% fee, while its spot Ethereum ETF will have a 2.5% fee. Below are the known fees and tickers so far:
- Franklin Templeton (FETH) — 0.19%
- Bitwise (ETHW) — 0.20%
- VanEck (ETHV) — 0.20%
- 21Shares (CETH) — 0.21%
- Blackrock (ETHA) — 0.25%
- Fidelity (EZET) — 0.25%
- Invesco Galaxy (QETH) — 0.25%
The Grayscale spot Ethereum ETF (ETHE) will have the highest fees at 2.5%. Many issuers waive or discount fees for 6 to 12 months or until a certain threshold is reached.
Bloomberg analyst Eric Balchunas highlights that Grayscale will not lower its fees, which are ten times higher than the competition, potentially causing significant outflows. He speculates that the Grayscale Mini ETF will be affordable, noting this as an interesting dynamic.
Waiving fees can have positive impacts, as demonstrated by VanEck’s chart, which showed $119 million in inflows after offering 0% fees for 12 months.
However, lower fees do not always lead to higher assets under management (AUM).
Expectations on the Spot Ethereum ETF
A Kaiko report suggests ETH could outperform Bitcoin BTC with the launch of Ether ETFs in the U.S. The ETH to BTC price ratio has risen to 0.05 since the SEC approved spot Ether ETFs, indicating a potential ETH bull run driven by institutional demand and low market liquidity.
ETH’s market depth has stabilized at around $230 million since the SEC approved spot ETFs, reversing a dip below $200 million in May. These ETFs are expected to enhance ETH liquidity, similar to the improvements seen for BTC after its ETF launch in January.
According to Tom Dunleavy’s statement to Cointelegraph, the launch of spot Ether ETFs is anticipated soon, with forecasts of $10 billion in inflows. Recent regulatory developments suggest the SEC will not target ETH as a security, while the CFTC classifies it as a commodity.
The spot Ethereum ETFs are estimated to launch on July 23, pending final comments on the issuers’ S-1 filings.
