- Several Ethereum ETF issuers have unveiled vital details of their product in amended filings.
- The amendments come as the community awaits the SEC’s trading nod.
- Experts are sticking to their predictions of the date of the expected approval.
2024 looks set to be the year of crypto ETFs. In January, all eyes were on Bitcoin as the SEC made the historic decision to approve spot Bitcoin ETFs. Now, this attention has shifted to Ethereum.
In May, the SEC made the shock decision to approve 19b-4 forms from spot Ethereum ETF applicants, setting the stage for eventual trading approval. Ahead of this expected decision, issuers have begun making last-ditch changes to their S-1 filings, which need to become effective before trading can begin. The latest batch of amendments includes filings from 21Shares, BlackRock, Fidelity, and VanEck.
Ethereum ETF Issuers Scramble in Search of SEC Greenlight
It is raining Ethereum ETF filing amendments. In filings on Friday, June 21, 21Shares, BlackRock, Fidelity, and VanEck all filed amendments to their Ethereum S-1 filings revealing seed capital and fee details.
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Per the filings, 21Shares, BlackRock, and Fidelity have seed capitals of about $340k, $10 million, and $4.7 million, respectively. On the other hand, VanEck’s seed capital is not clearly stated in its filing, which only mentions an initial purchase of 20,000 shares at a rate of $50 per share, with details on the redemption of the shares and final ETH purchase remaining blank.
The seed capital is the initial investment that allows an ETF to launch and be traded. It is meant to be large enough to cover the fund’s operational cost and establish a base asset under management level. The seed capital can be instrumental in a fund’s success as it speaks directly to its liquidity, which can build investor confidence about its viability.
For fees, VanEck is the only one in the recent batch to reveal its fees, presently set at 0.20%.
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Commenting on VanEck’s fee, Senior Bloomberg ETF Analyst Eric Balchunas described it as “pretty damn low.” The analyst suggested that the low fees could pressure other issuers to keep fees low.
"VanEck is in and so is their fee, which will be 0.20%, which is pretty damn low, right around Franklin's 0.19%. Adds a touch of pressure on BlackRock to stay under 30bps at least. So far looks like Eth gonna be as low or even lower fees than btc," he wrote.
Previously, Balchunas had suggested that most issuers had yet to reveal their fees because they were waiting for BlackRock.
"Fidelity kicking off the the S-1-athon. No fee included yet tho (Franklin only one w fee so far at 19bps). Bitwise didn’t include either. Everyone likely waiting till last min and/or on BlackRock to disclose to see what they need to orbit around," he wrote.
The sentiment came as BlackRock, owing to its reputation, has dominated Bitcoin ETF inflows so far. Offering competitive fees is one way other issuers can better compete.
Amid the recent flood of amendments, Balchunas has noted he and his colleague James Seyffart are sticking to their prediction of the S-1 approval date made a week ago.
Is a July 2 Approval Still in the Cards?
On June 14, Balchunas asserted that spot Ethereum ETFs would likely debut for trading on July 2. The ETF analyst expressed this view, noting that issuers had revealed that comments on S-1 filings had been light, with a chance that the SEC may want to get the process over and done with before the July 4 holiday weekend.
In an X post on June 21, Balchunas declared they maintained their July 2 prediction.
“We holding the line with July 2nd as our over/under for eth ETFs launch date,” he wrote.
On the Flipside
- Experts maintain that Ethereum ETFs are unlikely to record as much inflows as Bitcoin ETFs.
Why This Matters
Following the SEC’s approval of 19b-4 forms from Ethereum ETF applicants in May, the big question has been when these products would be approved for trading. The recent pace of S-1 registration amendments suggests that these funds will likely debut sooner rather than later.
Read this for more on the speculation surrounding ETH ETFs:
Ethereum ETFs Teased for July 2nd Launch: Here’s What We Know
Learn about Bitwise’s ETH ETF ad:
“Ethereum Doesn’t Clock Out at 4 p.m.”: Bitwise Unveils ETF Ad
