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

Following the abrupt approval of the Ethereum Spot ETFs by the US Securities and Exchange Commission (SEC), several prospective issuers have now filed amended versions of their S-1 forms. This development follows an initial directive from the commission that necessitated all asset managers vying to launch an Ether Spot ETF  to submit their draft S-1 filings on Friday.

Among the many S-1 amendments received by the SEC on Friday, Top asset management firm Franklin Templeton caught many spectators’ attention after becoming the first potential issuer of the Ethereum Spot ETF to reveal a sponsor fee.

So far this afternoon @vaneck_us, @InvescoUS/@galaxyhq, and @FTI_DA have submitted S-1 amendments for their #Ethereum ETFs. @Grayscale submitted yesterday and @BlackRock submitted on Wednesday.

Franklin coming in with 0.19% fee. Others haven't disclosed yet. pic.twitter.com/AGEyXqYBSP

— James Seyffart (@JSeyff) May 31, 2024

 The New York-based investment firm aims to charge a 0.19% fee on its Ether spot ETF if approved. Therefore, for every $1,000 invested in this fund, investors would need to pay $1.90 directed at covering the management and operational expenses with the ETF.

In any ETF market, sponsor fees are important factors that serve as incentives in attracting investments. With Franklin Templeton being the first issuer to reveal its sponsor fee, it may serve as a precedent as other asset managers may set figures around this value in a bid to entice investors. 

Notably, Franklin Templeton also offers the same sponsor fee for its Bitcoin spot ETF which ranks as one of the lowest fees in the specific ETF market. Alongside them, other issuers including VanEcK, Invesco Galaxy, Grayscale, BlackRock, and 21Shares have also turned in their amended S-1 forms to the SEC.

While the 19b-4 forms of these ETF applications were approved on May 23, the processing of the S-1 forms remains critical for any form of trading to commence. Notably, this process may be lengthy as the submitted S-1 forms are subject to comments from the Commission, which will likely necessitate further amendments.

In other news, prominent investment bank JPMorgan has projected the Ethereum spot ETFs to perform far less than their Bitcoin counterparts. According to multiple reports, JPMorgan analysts predict these ETFs can only attract investments of about $3 billion in 2024, which could rise to $6 billion if staking is introduced. 

For context, the Bitcoin spot ETFs launched in January are currently valued at $13.69 billion according to data from SoSoValue. In a recent interview, Bloomberg analyst James Seyffart shared similar sentiments with JPMorgan, highlighting the massive difference in the market cap of Ethereum and Bitcoin.

At the time of writing, Ethereum trades at $3.777 with a slight gain of 0.45% in the last 24 hours. In tandem, the asset’s daily trading volume is up by 4.80% and valued at $15.40 billion.

Featured image created with DALL·E, chart from Tradingview