On May 31, 2024, prominent financial institutions including Franklin Templeton, VanEck, Invesco, and Galaxy submitted revised Form S-1 applications to the U.S. Securities and Exchange Commission (SEC), aiming to launch Ethereum-based spot exchange-traded funds (ETFs). This announcement was highlighted by James Seyffart, an analyst at Bloomberg Intelligence, pointing to a significant development in the cryptocurrency investment landscape.

Franklin Templeton has emerged as the first company to disclose the fee structure for its proposed ETF. The company stated that it plans to charge investors a daily management fee, which will amount to an annual rate of 0.19% of the ETF’s net asset value. This move sets a precedent in what Bloomberg Intelligence analyst Eric Balchunas referred to as the "first shot fired in the fee war among Ethereum spot ETFs."

The so-called "sponsor fee," which covers the administrative costs of managing the fund, is a critical factor in the competitive landscape of ETFs. Typically, investors gravitate towards products offering the lowest fees, making this aspect crucial for the success of any ETF.

While Franklin Templeton disclosed its fee structure, other firms that also resubmitted their Form S-1 applications on May 31 did not reveal their fee sizes. BlackRock and Grayscale Investments, meanwhile, made amendments to their documents on May 29 and May 30, respectively.

In a separate development, 21Shares submitted an updated application for its own Ethereum spot ETF, notably without the involvement of Ark Invest. The newly rebranded fund will be called the 21Shares Core Ethereum ETF. Ark Invest confirmed their withdrawal from the joint ETF project, citing a need to reevaluate their investment strategy. However, they assured that this decision would not affect their ongoing collaboration with 21Shares on other products, particularly the Bitcoin spot ETF launched in January 2024.

This flurry of activity follows the SEC’s formal approval of Ethereum spot ETFs on May 23, 2024. Although the regulator has approved the concept, trading cannot commence until the SEC approves the specific Form S-1 applications from the issuers, a process that could take several months.

These developments reflect a growing institutional interest in cryptocurrency as a legitimate asset class and signify potential shifts in the ways investors can engage with digital currencies through traditional financial structures.