Following the sudden approval of Ethereum Spot ETFs by the U.S. Securities and Exchange Commission (SEC), several potential issuers have now filed revised versions of their Form S-1s. These changes follow an initial directive from the commission that required all asset managers seeking to launch the Ether Spot Fund to file their draft S-1 applications on Friday.
Franklin Templeton opens the floor with a 0.19% sponsor commission
Among the slew of S-1 amendments received by the SEC on Friday, top asset management firm Franklin Templeton caught the attention of many viewers after it became the first potential issuer of the Ethereum Spot ETF to disclose a sponsorship fee.
So far this afternoon @vaneck_us, @InvescoUS/@galaxyhqAND @FTI_DA submitted S-1 amendments to theirs #Ethereum ETFs. @Grey scale filed yesterday and @Czarna Skała submitted on Wednesday.
Franklin enters with a fee of 0.19%. Others have not revealed yet. pic.twitter.com/AGEyXqYBSP
— James Seyffart (@JSeyff) May 31, 2024
The Novel York-based investment firm intends to charge a 0.19% fee on its spot Ether ETF if approved. Therefore, for every $1,000 invested in this fund, investors would have to pay $1.90 to cover the management and operating costs of the ETF.
In any ETF market, sponsor fees are significant incentives to attract investment. Since Franklin Templeton is the first issuer to disclose its sponsor fee amount, it could set a precedent as other asset managers may set numbers around this figure in an attempt to attract investors.
It’s worth noting that Franklin Templeton also offers the same sponsorship fee for its Bitcoin ETF spot, which is one of the lowest fees in the specific ETF market. In addition, other issuers including VanEcK, Invesco Galaxy, Grayscale, BlackRock and 21Shares also filed their amended Form S-1s with the SEC.
Although Forms 19b-4 for ETF applications were approved on May 23, the processing of Forms S-1 remains critical for initiating any form of trading. In particular, this process may be lengthy because Form S-1 submissions are subject to Commission comments, which will likely require further revisions.
JPMorgan predicts lower demand for Ethereum spot ETFs
In other news, prominent investment bank JPMorgan is predicting that spot Ethereum ETFs will perform significantly worse than their Bitcoin counterparts. According to multiple reports, JPMorgan analysts predict that these ETFs could attract investments worth only about $3 billion in 2024, and with the introduction of staking, this amount could boost to $6 billion.
For context, Bitcoin spot ETFs launched in January are currently valued at $13.69 billion data from SoSoValue. In a recent interview, Bloomberg analyst James Seyffart shared similar views with JPMorgan, highlighting the huge difference in the market capitalization of Ethereum and Bitcoin.
At the time of writing, Ethereum is trading at $3,777 with a slight boost of 0.45% over the last 24 hours. In both cases, the daily trading volume of this asset increased by 4.80% and was valued at $15.40 billion.
Featured image created with DALL·E, chart from Tradingview
