SEC's Shift Boosts HBAR ETF Odds Despite 1.95% Fee

Canary Capital has disclosed a 1.95% management fee for its proposed HBAR spot exchange-traded fund (ETF), marking one of the highest fee structures among crypto-based ETFs, while its Litecoin ETF carries a 0.95% fee. The HBAR ETF, which tracks the native token of the Hedera network, is designed to provide investors with exposure to the token without direct ownership or storage requirements. The firm’s SEC filing on September 22, 2025, amended its S-1 registration to include this fee structure, reflecting confidence in growing demand for HBAR despite a 7% price decline to $0.22 on the same day.

The 1.95% fee for the HBAR ETF contrasts sharply with the 0.95% fee proposed for Canary’s Litecoin ETF, which aligns with typical fee ranges for major crypto ETFs (0.2%–2%). The disparity underscores the firm’s strategic positioning for altcoin ETFs, particularly in a regulatory environment where approval probabilities for such products have risen to 90%, according to Bloomberg analysts. This shift is attributed to the U.S. Securities and Exchange Commission’s (SEC) evolving stance on digital assets, which has reduced barriers for altcoin exposure through regulated vehicles.

Market dynamics further highlight HBAR’s trajectory: despite a 7% price drop, the token’s 24-hour trading volume surged 152% to $438 million, indicating robust investor interest amid broader crypto market volatility. Analysts suggest this volume spike reflects anticipation of regulatory clarity, with the HBAR ETF potentially serving as a gateway for traditional investors seeking access to Hedera’s blockchain ecosystem without navigating crypto custody complexities.

The HBAR ETF’s structure mirrors broader industry trends toward institutional-grade crypto products. Hedera, a blockchain platform focused on enterprise applications, has positioned itself as a key player in decentralized solutions. Canary’s approach aligns with growing institutional appetite for altcoins, particularly as regulatory frameworks mature. However, the 1.95% fee raises questions about cost competitiveness, especially for assets with lower price points like HBAR, where transaction costs represent a significant proportion of the investment.

Regulatory developments remain pivotal. The SEC’s recent shift in oversight has catalyzed momentum for altcoin ETFs, with HBAR, XRP, and Solana among the most discussed candidates. If approved, the HBAR ETF would join a nascent but expanding category of products democratizing access to altcoins, offering investors a simplified route to diversify crypto exposure while mitigating risks associated with direct token ownership.

Source: [1] Canary Capital Confirms 1.95% Fee for HBAR Spot ETF (https://coincentral.com/canary-capital-caconfirms-1-95-fee-for-hbar-spot-etf-with-approval-in-sight/) [2] Canary unveils 1.95% fee for spot HBAR ETF (https://cryptobriefing.com/canary-unveils-1-95-percent-fee-hbar-etf/)