Major Investment Firms Including BlackRock and Fidelity Prepare for Spot Ethereum ETF Launch Next Week

In a significant move that may reshape the landscape of cryptocurrency investment in the United States, a cohort of leading financial and investment firms, including BlackRock, Franklin, Bitwise, Invesco, Grayscale, and Fidelity, have submitted updated S-1 forms for their respective Spot ethereum ETFs. This development, heralded as a crucial step in their ongoing efforts to secure approval from the U.S. Securities and Exchange Commission (SEC), signals a potential launch of these ETFs in the coming week, underscoring the firms’ readiness to transition to the trading phase.

The amendment of these S-1 forms, particularly the specification of management fees, marks a pivotal phase in the preparation for trading, indicating that these firms are on the verge of finalizing their offerings. BlackRock, for instance, has set a management fee of 0.24% for its Spot Ethereum product, while emphasizing its discretion to modify or waive this fee under certain conditions. This fee strategy is consistent on a daily basis, with payments due on a quarterly schedule.

Bitwise has announced a slightly lower fee of 0.19% for its offering, coupled with an introductory discount for the initial $500 million in assets for the first six months. In contrast, Grayscale, known for its higher fee structure, charges 2.45% for its Ethereum Trust, though it plans to launch a mini Ethereum ETF with a more competitive fee of 0.24%, including a waiver for assets up to $2 billion or for a duration of up to 12 months.

Other firms, such as Invesco Galaxy and Fidelity, have aligned their fees with BlackRock’s, setting them at 0.24%, though Fidelity has indicated a fee exemption period extending to the end of 2024. Franklin Templeton stands out with the lowest fee of 0.18%, including a substantial waiver of $11 billion until January 31, 2025. Furthermore, 21Shares has disclosed a fee of 0.20% for its Ethereum ETF, which will also benefit from a six-month exemption or until the trust’s assets reach $500 million.

These amended filings come in the wake of the SEC’s approval of critical 19b-4 forms for eight physically settled Ethereum ETFs on May 23, a prerequisite for the issuers to commence the sale of securities. According to Eric Balchunas, a senior ETF analyst at Bloomberg, the SEC has requested the final S-1 forms from the issuers, setting a tentative effectiveness date of July 22, with the anticipated launch following on July 23. This timeline suggests that the approval process with the SEC is in its final stages.

Moreover, the SEC has recently approved two spot Ethereum exchange-traded funds, namely Grayscale Ethereum Mini Trust and ProShares Ethereum ETF, for listing on the New York Stock Exchange (NYSE)’s Arca electronic platform, as announced on July 17. These approvals allow the NYSE to trade the funds on behalf of the companies, pending final comments on the S-1 filings.

Grayscale has also expressed its intention to transfer shares of the new Mini Trust to the owners of the ETHE fund, a move that underscores the firm’s commitment to providing institutional investors with direct investment opportunities in Ethereum since its launch in 2017. With these regulatory advancements, the eight spot Ether ETFs are poised to receive the final nod from the SEC as early as July 23, following extensive discussions and amendments to the S-1 filings.

This wave of filings and approvals represents a significant milestone in the integration of cryptocurrency into mainstream financial markets, offering investors regulated and transparent vehicles for investing in Ethereum. As these ETFs prepare to make their debut, they not only signify the growing acceptance of digital assets by regulatory authorities but also highlight the evolving landscape of investment options available to both institutional and individual investors.