Investment firm Franklin Templeton has taken a significant step in the world of spot Ethereum ETFs by unveiling a sponsor fee of 0.19%.

The competition for sponsor fees in spot Ethereum ETFs is heating up as Franklin Templeton, a prominent asset management company, has revealed its sponsor fee of 19 basis points (bps).

Franklin Templeton Sets a New Standard with 0.19% Sponsor Fee for Spot Ethereum ETFs

Following the approval from the Securities and Exchange Commission (SEC) for the proposed rule change on the Ethereum ETF, applicants were required to secure approval for S-1 registrations to initiate trading. Franklin Templeton recently submitted an updated version of its S-1 application in response to the SEC's deadline for updated filings. In their filing, the ETH ETF issuer announced a sponsor fee of only 0.19%.

This fee establishes a benchmark for other spot Ethereum ETF issuers as they prepare to submit their S-1 applications. Franklin Templeton's spot Bitcoin ETFs initially had a 0.19% fee, which was reduced by 10 bps, making it the Bitcoin ETF issuer with the lowest fee compared to its competitors.

In a similar move, Franklin Templeton waived fees for the first six months after launching its spot Bitcoin ETF. It remains uncertain whether issuers of the newly approved Ethereum ETFs will follow a similar strategy.

Potential Fee Adjustments in the ETF Market

The question arises whether Grayscale Investments will reconsider its 1.5% sponsor fee precedent in light of Franklin Templeton's competitive fee structure. Grayscale's CEO, Michael Sonnenshein, defended the 1.5% fee citing the trust's strong track record, market liquidity, and specialized focus in the crypto space. However, with the ETF's underperformance and outflows, a review of the GBTC fee became inevitable. Ultimately, most spot Bitcoin ETF issuers settled on fees ranging from 0.19% to 0.25%.

With Franklin Templeton leading the way with a 0.19% sponsor fee, competitors like BlackRock are likely to follow suit with similar fee structures. This fee competition among ETF issuers could shape the market dynamics and determine the dominant players.

Meanwhile, the spot Ethereum ETF issuers are anticipated to undergo further updates before a final decision on their listing, indicating ongoing developments in this evolving market segment.