Invesco and Galaxy have announced that the management fees for their Invesco Galaxy Ethereum ETF (QETH) will be set at 0.25%.
This decision, detailed in an amended filing to United States regulators on July 9, underscores the intensifying competition among Ethereum exchange-traded fund (ETF) sponsors as the anticipated rollout of spot Ether (ETH) funds approaches.
Invesco’s Ether ETF fees higher than competitors
The competition among ETH ETF sponsors is heating up, with Invesco’s fee announcement positioning it slightly higher than its closest rivals, VanEck and Franklin.
VanEck and Franklin Templeton have set their fees at 0.20% and 0.19%, respectively, in their S-1 registrations.
This growing competition among ETF issuers is likely to benefit spot investors significantly. As fund managers vie for market share, the resulting fee reductions could make cryptocurrency investments more accessible and affordable.
Historically, competition in the ETF market has led to lower fees, as seen in the Bitcoin ETF space.
After US regulators approved the listing of Bitcoin (BTC) ETFs in January, nearly half of the BTC ETFs on the market either slashed their management fees or temporarily waived them to attract investor funds from competitors.
Already, the proposed management fees for the new Ethereum ETFs are dramatically lower than those for existing products like Grayscale’s Ethereum Trust (ETHE).
Launched in 2017, ETHE has been one of the few Ethereum investment vehicles available to US investors, but its higher fees have made it less competitive compared to the newly proposed ETFs.
On the sidelines, Grayscale has plans to introduce its own spot Ethereum ETF, the Grayscale Ethereum Mini Trust (ETH), although the management fees for this product have not yet been disclosed.
Details of the Invesco Galaxy Ethereum ETF (QETH)
The Invesco Galaxy Ethereum ETF is designed to track the performance of the ETH-USD Lukka Prime index.
This index aims to provide a reliable benchmark for the value of Ethereum, reflecting its market performance accurately.
By tracking this index, QETH offers investors a transparent and direct way to invest in Ethereum, aligned with the actual market movements of the cryptocurrency.
Despite the enthusiasm surrounding these new ETFs, none of the proposed spot crypto ETFs, including QETH, feature staking. This is due to resistance from the US Securities and Exchange Commission (SEC), which has led several top fund sponsors, including Ark Investments Management and Fidelity Investments, to drop staking plans from their proposed spot ETH ETFs.
Staking, which allows investors to earn rewards by participating in the network’s validation process, remains a point of contention in the regulatory landscape.
Anticipated Ethereum ETFs launch date
Although the S-1 registrations for the Ethereum ETFs do not include specific start dates, industry analysts expect that spot ETH ETFs could begin trading as early as this month. The SEC Chair, Gary Gensler, had indicated the ETFs could be approved for trading this summer after the 19b-4 forms were approved earlier this year.
The wave of applications for publicly traded crypto investment vehicles signals a growing interest and confidence in the cryptocurrency market.
Additionally, the Chicago Board Options Exchange (CBOE) has filed applications to list VanEck and 21Shares’ proposed spot Solana (SOL) ETFs, with a final decision from US regulators expected around March 2025.
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