Ethereum ETF Fee War Begins as Franklin Templeton Sets 0.19%

Franklin Templeton sets a 0.19% fee for its new Ethereum ETF, matching its Bitcoin ETF fee.
Franklin is the first to disclose ETF fees among competitors like VanEck and Invesco.
The fee announcement may trigger a fee war among Ethereum ETF issuers.

Franklin Templeton has recently amended its S-1 application for its upcoming spot, Ethereum ETF, revealing a sponsor fee of 0.19%. This announcement places Franklin Templeton as the first among several applicants to disclose such fees, setting a potential benchmark for the industry. The fee matches that of their existing spot Bitcoin ETF, signalling a strategic consistency in their approach to digital asset funds.

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The fee, a percentage of the fund’s net asset value, accrues daily. This development is part of the broader context of competitive fee structures in the ETF market, where lower fees can significantly attract more investors. The disclosed fee is seen as an aggressive move to position the ETF attractively in a competitive market.

Other Industry Players Yet to Disclose Fees

While other major players like VanEck, Invesco, and Galaxy, who also submitted amended S-1 applications on the same day, have yet to reveal their fee structures.

In an X post, Bloomberg ETF analyst Eric Balchunas noted the start of what may become a fee war among Ethereum ETF providers. Historically, such competition has led to reduced fees across the industry, as seen during the launch of spot Bitcoin ETFs, where some issuers even waived fees to gain market share.

Market Response

The market is now observing how other ETF issuers will respond to Franklin Templeton’s fee announcement. Analysts suggest that the consistency in fee structures between their Bitcoin and Ethereum ETFs may set a standard that other issuers will either meet or undercut. The ETF market, particularly in the cryptocurrency sector, remains highly sensitive to fee structures due to their significant impact on investor returns.

Additionally, the broader anticipation for the SEC’s approval of spot Ether ETFs suggests that the final decision could lead to significant market movements. Experts predict that further amendments and adjustments to the filings will occur as issuers refine their offerings in response to SEC feedback and competitive pressures.

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Ronny Mugendi

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