The cryptocurrency industry is welcoming more spot Ethereum exchange-traded funds [ETF] into its ecosystem. More recently, VanEck filed Form-8A for its spot Ethereum ETF. Several analysts in the market have been expecting July 2 as the launch date for these funds. Along with this, VanEck was trying to stay ahead of the curve by completely waiving the ETF fees.
According to a recent email from Matthew Nigel, the head of digital assets at VanEck, the firm won’t be charging a fee for its Ethereum ETF. The duration of this initiative is uncertain but will likely last until 2025. But the fund’s zero-cost structure will end if its assets hit $1.5 billion before this deadline. Following this, the fund will have a 0.20% fee.
Eric Balchunas, Bloomberg’s ETF analyst, stated that issuers rarely disclose their fee structure so early on, before the launch period. VanEck, however, wasn’t the only firm to do this. Franklin Templeton previously noted that it would charge a 0.19% fee for its spot Ethereum ETF. Speaking about the same, Balchunas said,
“What BlackRock is going to charge is prob the single most imp missing variable outside of the exact launch date. Their fee is the sun that the rest will need to orbit around. Must be nice.”
Also Read: Ethereum ETF Demand to be Lower Than Bitcoin, Says Bernstein
Why is VanEck Going With ‘Zero Fees?’
It looks like VanEck is aware of the loss it would incur by starting the zero-fee initiative. In the email sent to ETF.com, Sigel said,
“[VanEck] aims to be a leader on crypto ETF fees even if it means we lose money at the outset. The plan is to make it up on volume; in this case, decentralized finance volume.”
Amidst this, ETH was trading at $3,382.65 following a 5% decline over the last seven days.
Also Read: SEC Chair Gensler Says Ethereum ETF Approval is Going Smoothly