Grayscale Ethereum Mini Trust Lowers Fees to 0.15% to Gain Edge

Canadian investment firm Grayscale Investments has cut the annual management fee charged on its Ethereum Mini Trust (ETH) in a bid to improve market offering.

According to the S-1 document updated on July 18 with the US SEC, the fee has been adjusted from 0.25% to 0.15%. For the first six months, the fee will be charged at zero on the first two billion dollars of assets under management (AUM).

UPDATED Table of Ethereum ETFs and their fees that are set to launch next week. Grayscale's $ETH will now be the lowest cost ETF at 0.15% pic.twitter.com/UjoaHvHegH

— James Seyffart (@JSeyff) July 18, 2024

With the fee reduction, the Grayscale Ethereum Mini Trust becomes the cheapest spot Ether ETF and is, therefore, attractive to investors. Other spot Ether ETF issuers may follow the same suit following the reduction of fees. For instance, ProShares Ethereum Trust may postpone the launch, which has not filed the updated S-1 documents as of Friday during the London session.

The decision has been made to attract more investors to the Grayscale Ethereum Mini Trust especially those who want to reduce their costs. The increasing adoption of Ethereum in various web3 projects and digital assets further reaffirms this move. Ethereum leads in real assets’ tokenization and smart contracts, which are essential for the network’s development.

Divestment and Asset Management

Grayscale wants to sell 10% of its $10 billion in the Grayscale Ethereum Trust ($ETHE) to fund the Ethereum Mini Trust. This follows as ETHE may be likely to witness massive redemptions owing to its high sponsor fee of about 2.50%. This is similar to the behavior of GBTC after it got listed on the market and is due to market competition.

The fee cut by Grayscale Ethereum Mini Trust corresponds to the general market tendencies when rivalry between issuers is expected to lead to fee slashing. The approval of the rule change by the SEC to list and trade shares of the Grayscale Ethereum Mini Trust and ProShares ETF is an indication that there is growing interest in the spot ether ETFs by the regulators.

Effects of Ethereum on the Price and Investors

Ethereum has seen its price climb by over 17% in the last two weeks to stand at around $3,403 at press time. This increase can be tied down to the publicity of the upcoming spot Ether ETFs in the United States. The fully diluted market capitalization of Ethereum is approximately $406 billion while the daily trading volume is around $14 billion making it attractive to retail and institutional investors.

Looking at the support level that has been presented between $2,808 and $2,915 over the past four months, Ethereum has the opportunity to make new highs. The coming of Ethereum staking and the auto-burning mechanism has produced confidence in Ether as a digital asset, and in turn, increased investors’ interest.

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