VanEck Plans Fee Waivers for Ethereum ETF Launch to Attract Investors

VanEck is set to launch an Ethereum (ETH) ETF, offering zero fees initially to attract investors.

This strategy, similar to early Bitcoin ETFs, aims to boost initial inflows. The ETF will involve transferring ETH and incurring gas fees, adding complexity. Unlike some Bitcoin ETFs, VanEck’s fund will need its own process for acquiring ETH, which is crucial in decentralized finance (DeFi).

VanEck will waive the 0.2% Sponsor Fee for the first $1.5 billion of fund purchases or for a limited time post-launch. Shares will be sold in baskets of 25,000. The launch is expected in late June or early July.

VanEck is seeking SEC approval for in-kind delivery, allowing buyers to receive actual ETH, possibly using self-hosted wallets. The custodian will have significant insurance coverage for security.

The Ethereum ETF’s volume is expected to be 10-15% of the Bitcoin ETF’s. The launch could cause a supply shock due to ETH’s deflationary nature and high staking rates, potentially sparking a market rally.

Alexander Stefanov