Markets
Grayscale Reduces Ethereum Mini Trust Fees to 0.15%, Lowest on the Market
Greyscaleone of the broadcasters of the upcoming Ethereal exchange-traded funds (ETFs), has lowered the management fee for its Mini Trust from 0.25% to 0.15%, according to a July 18 release.
The company declared:
“Grayscale Investments has updated its registration statement for Grayscale Ethereum Mini Trust to reflect a 0.15% management fee. Additionally, we are waiving the fee to 0% for the first six months, applicable up to $2 billion in assets under management (AUM).”
This move places Grayscale Ethereum ETFs as both the cheapest and the most expensive. The Grayscale Ethereum Trust (ETHE), which will convert to an ETF, maintains a 2.5% fee structure, while the Mini Trust would attract the cheapest fee on the market.
Ethereum ETF Fees (Source: Karl/X)
Market analysts previously expected that ETHE’s high fees could push investors towards cheaper alternatives from rivals like Black rockFidelity Investments, VanEck, Bit by bitand Franklin Templeton, with commissions between 0.19% and 0.25%.
In particular, a similar situation has occurred with spot Bitcoin ETFs. Grayscale’s Bitcoin Trust has has experienced over 18 billion dollars in outflows since its conversion to an ETF in January, with investors flocking to cheaper ETFs from BlackRock and others.
To prevent this from happening again, Grayscale is seeding its Mini Trust by reallocating 10% of the $10 billion from ETHE. And by lowering the Mini Trust fees, Grayscale is offering the most competitive rates.
Market observers believe this move could tame some of the likely outflows from ETHE. Cryptocurrency analyst Karl She said:
“Grayscale has lowered ETH fees to 0.15%. It is now the most competitive ETF from a fee perspective, this will likely avoid [assets under management] losses from Grayscale and reduce ETHE outflows. There are rumors that the ETHE -> ETH conversion is tax-free, which would be even more bullish.”
Likewise, Nate Geraci, president of ETF Store, emphasized the importance of this move, saying that it was a bold strategy given Grayscale’s pivotal role in launching crypto ETFs.
He added:
“Grayscale has paved the way for regulation for spot btc and eth ETFs. Period. There is no reason not to capitalize on this by taking a leadership position in how they approach competition in the spot crypto ETF category.”