Fidelity, one of the world’s largest asset managers, is set to launch an Ethereum ETF with $4.7 million in seed funding. This news comes after the company filed a regulatory form stating that the proceeds from the sale of the seed baskets totaled $4,749,975.00.
The funds were used to purchase 1,250 ETH on June 4, with each share priced at $38. Fidelity’s decision to seed its Ethereum ETF demonstrates confidence in the fund and provides liquidity for initial buyers. In comparison, when Fidelity launched its Bitcoin ETF earlier this year, it seeded the fund with $20 million.
Competitors like BlackRock and Bitwise have also entered the ETF market, with Bitwise seeding its Ethereum ETF with $2.5 million and Pantera Capital Management expressing interest in buying $100 million worth of shares. BlackRock, on the other hand, announced that it would seed its funds with $10 million, matching its initial investment in the Bitcoin fund.
While some providers have revealed their seed funding, Franklin Templeton is one of the few to disclose the management fee for their Ethereum fund, matching their Bitcoin product at 0.19%. This makes it the most affordable option among Bitcoin and Ethereum ETFs, with VanEck’s fee slightly higher at 0.2%.
Analysts predict that Ethereum ETF flows may not surpass Bitcoin’s, but they are expected to outperform other newly launched ETF products. Bloomberg ETF analyst Eric Balchunas estimates that the funds will go live around July 2, with many providers waiting for BlackRock to disclose their information before finalizing their plans.
In terms of performance, experts anticipate that Ethereum ETFs will attract a significant amount of investment. While Balchunas predicts that the funds will attract 20% of the flows seen by Bitcoin ETFs, K33 Research suggests a higher figure of 28% in the next five months. Standard Chartered even projects that Ethereum ETFs could attract $45 billion in inflows within a year.
Overall, the launch of Ethereum ETFs is expected to bring significant attention to the cryptocurrency market and provide investors with new opportunities to diversify their portfolios. As more providers reveal their fees and launch dates, the landscape of crypto ETFs is likely to evolve rapidly in the coming months.