VanEck Proposes 0.2% Fee for Ether ETF Following Partial Regulatory Win

Monday, 24/06/2024 | 14:40 GMT by Jared Kirui

This step followed the SEC’s approval of applications from major exchanges to list ETFs tied to the price of ether.

VanEck is among nine issuers, including ARK Investments/21Shares and BlackRock, aiming to launch ether ETFs.

Investment management firm VanEck has set a fee of 0.2% for its proposed spot ether exchange-traded fund (ETF), Reuters reported. This announcement, detailed in a US Securities and Exchange Commission (SEC) filing, comes at a time of significant regulatory advancements for cryptocurrency ETFs.

Paving the Way for Ether ETFs

Last month, the SEC approved applications from major exchanges such as Nasdaq, CBOE, and NYSE to list ETFs tied to the price of ether, the second-largest cryptocurrency by market capitalization. This important approval could allow these products to begin trading by the end of the year, offering new opportunities for investors.

VanEck is one of nine issuers, including notable names like ARK Investments/21Shares and BlackRock, seeking to launch these Ether ETFs. The competition in this sector highlights a growing interest in providing investors with easier access to cryptocurrency investments without the direct ownership and associated risks of holding cryptocurrencies like Ethereum.

A spot ether ETF like the one proposed by VanEck allows investors to gain exposure to ether's price movements without managing and storing the digital assets themselves. This simplification is expected to attract a broader range of investors seeking to avoid the technical and security challenges of direct ownership of crypto.

Last year, VanEck entered the Ethereum blockchain space after launching VanEck Ethereum Strategy ETF (EFUT). The company mentioned that this fund, structured as a C-Corp, seeks to enhance how investors could benefit from the future of Ethereum (ETH. EFUT focuses on ETH futures contracts and offers investors an investment opportunity that reportedly provides a tax advantage in the long term.

VanEck Ethereum Strategy ETF

Specifically, EFUT invests in standardized, cash-settled ETH futures contracts traded on commodity exchanges registered with the CFTC. Initially, the fund will focus on ETH futures traded on the Chicago Mercantile Exchange.

Last month, the crypto industry achieved a significant milestone when the SEC approved the listing of ether ETFs on American exchanges. However, the agency has yet to approve trading of these assets, Finance Magnates reported.

The regulator must approve the S-1 forms filed by potential fund issuers for these assets to be allowed to trade. The S-1 registration forms contain detailed information about new securities to be offered to the public. For ETFs, these forms include the fund’s structure, management, and investment strategy, along with details on the methods of tracking the performance of the underlying assets.