The current market position of Grayscale Investments might compel it to consider a reduction of the sponsor fee for its Ethereum Trust.
SEC Approves Spot Ethereum ETFs
The Grayscale Ethereum Trust (ETHE) reportedly experienced a decrease in its discount to Net Asset Value (NAV).
According to insights provided by ETFstore charts, this metric currently sits at 1.45% after reaching as high as 50% a year ago. Notably, the intense reduction comes around the time that the United States Securities and Exchange Commission (SEC) approved the 8 spot Ethereum ETF products.
This milestone development from the Commission impacts the broader crypto investment sphere. To commence trading, SEC has asked spot Ethereum ETF applicants to submit their S-1 amendments which most of them have done. The expectation now is that the regulator will allow the product to go to the market soon. Per analyst’s projections, this might come at the latest by the first week of July.
Gary Gensler, the SEC Chairman, once hinted at the possibility of the ETFs hitting the market this summer.
Grayscale to Join Spot Ethereum ETF Sponsor Fee Competition
As the potential S-1 approval draws closer, the competition on sponsor fees is also becoming evident. Last month, Franklin Templeton established its fee at 0.19% for its Ethereum ETF while VanEck announced its fee would be set at 0.20%.
Grayscale is known for its high sponsor fee structure like in the case of its spot Bitcoin ETF GBTC. For the Bitcoin ETF, the top investment management firm fixed the fee at 1.5%. This made it end up as the highest amongst its counterparts. Unfortunately, Grayscale’s GBTC recorded intense outflows, a trend linked to its high sponsor fee.
Considering how unprofitable its fee for GBTC was with BlackRock surpassing it in AUM, it is expected that Grayscale would avoid a recurrence by reducing its Ethereum Trust fee. Seeing that most of the Ethereum ETF sponsor fee lies around 0.20%, Grayscale may follow the same path. This might help it enhance its market position.
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