Ethereum Spot ETF: Franklin Templeton Launches Fee War With 0.19% Offer

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As an experienced financial analyst, I have closely followed the developments in the crypto ETF market, particularly the recent filings by various asset managers for Ethereum Spot ETFs with the US Securities and Exchange Commission (SEC).

After the unexpected green light from the US Securities and Exchange Commission (SEC) for Ethereum Spot ETFs, several potential issuers have now updated their S-1 applications. This occurs after an earlier instruction from the commission required all Ethereum ETF applicants to submit their draft filings by last Friday.

Franklin Templeton Opens Floor With 0.19% Sponsor Fee

In the pile of S-1 amendments submitted to the SEC last week, Franklin Templeton, a prominent asset manager, stood out by disclosing the sponsor fee for what could be the first Ethereum Spot ETF.

This afternoon, Vaneck US, Invesco US/Galaxy HQ, and FTI Filings have each filed preliminary prospectus applications with the Securities and Exchange Commission for their Ethereum exchange-traded funds. Grayscale submitted its application the previous day, while BlackRock did so on Wednesday.

Franklin coming in with 0.19% fee. Others haven’t disclosed yet.

— James Seyffart (@JSeyff) May 31, 2024

An investment firm based in New York intends to levy a fee of 0.19% on its Ether spot ETF should it be authorized. Consequently, for each $1,000 invested in this fund, investors would be required to set aside approximately $2 in total (or $1.90 specifically) towards managing and running the ETF.

As an analyst, I would emphasize the significance of sponsor fees in the ETF market, explaining that they function as incentives for investors. When Franklin Templeton disclosed its fee structure first, it could potentially pave the way for other asset managers to follow suit and reveal their own fees, creating competition among providers and ultimately benefiting investors by increasing transparency and potentially leading to lower fees.

As an analyst, I’ve observed that Franklin Templeton, much like other notable issuers such as VanEck, Invesco Galaxy, Grayscale, BlackRock, and 21Shares, have all filed amended S-1 forms with the SEC. Notably, Franklin Templeton’s sponsor fee for its Bitcoin spot ETF is comparable to theirs and ranks among the lowest in the specific ETF market.

The approval of the 19b-4 forms for these ETF applications came through on May 23rd. However, the key step for trading to begin is still the processing of the S-1 forms. It’s important to note that this stage can be time-consuming since the Commission may provide comments requiring modifications before approval.

JPMorgan Predicts Lower Demand For Ethereum Spot ETFs

In recent developments, esteemed investment firm JPMorgan anticipates that Ethereum-based spot ETFs will underperform compared to their Bitcoin counterparts. Based on several sources, JPMorgan analysts forecast these ETFs will draw in approximately $3 billion in investments by 2024, potentially increasing to $6 billion if staking becomes an option.

As a researcher studying the cryptocurrency market, I’ve noticed an intriguing development: Bitcoin spot ETFs, which were launched in January and are currently valued at $13.69 billion based on data from SoSoValue, pale in comparison to the market capitalization of Ethereum. In a recent interview with Bloomberg, analyst James Seyffart echoed this sentiment, expressing the significant disparity between the two leading cryptocurrencies in terms of their market value.

Currently, Ethereum is priced at $3.777, representing a modest increase of 0.45% over the past 24 hours. In sync with this growth, its daily trading volume has risen by 4.80%, amounting to a significant value of $15.40 billion.

Ethereum Spot ETF: Franklin Templeton Launches Fee War With 0.19% Offer

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2024-06-01 13:16