JPM - Analysts Question Strategy Behind High Fees Of Grayscale Ethereum Spot ETF: They Seem Focused On 'Maximizing Short-Term Revenue Vs Playing Long Game' | Benzinga
Eric Balchunas, a renowned financial analyst, recently expressed skepticism about the potential success of Grayscale’s Ethereum (CRYPTO: ETH) spot ETF due to its high fee structure.
What Happened: Grayscale submitted updated S-1 filings with the SEC Wednesday, revealing the all-important information about the fund management fee. The digital asset management giant will charge 2.5% for its Grayscale Ethereum Trust, significantly higher than its competitors. A miniature version of the fund, Grayscale Ethereum Mini Trust, will however charge 0.25%.
Balchunas questioned these moves, asking whether the 0.25% fee would be low enough to attract sufficient organic flows to offset what he referred to as “The Big Unlock”.
He further speculated on the ability of new entrants to the market to counterbalance the predicted outflows due to the flagship version’s high fees, drawing a parallel with Bitcoin (CRYPTO: BTC). “Anyway short story is the 2.5% fee made path to a decent net flow number a ...