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Spot Bitcoin ETF applicants revealed planned fees for their products as a war for market share breaks out even before the new investment vehicles are approved for sale.
Multiple fund managers that have applied to launch Bitcoin ETFs (exchange-traded funds) revealed their fees in forms submitted to the Securities and Exchange Commission (SEC).
And the players have come out slugging with a decision by the regulator expected on at least one application by tomorrow.
Bitwise is waiving fees for the first six months or until it reaches $1 billion in assets with a subsequent charge of 0.24%.
Ark/21Shares will also waive fees for the first six months or until the fund hits $1 billion in assets, after which it will charge 0.25%.
I spoke too soon re: low-water mark!
Ark and 21Shares are going 0.25% and *NO FEE* for the first six months or until $1 billion in assets
these are very, very low numbers https://t.co/zjCRNPJpts pic.twitter.com/NrifnrAAWe
— Katie Greifeld (@kgreifeld) January 8, 2024
BlackRock has also disclosed a 0.2% fee for the first year or until it hits $5 billion in assets, before increasing its charge to 0.30%.
According to Bloomberg ETF analyst Eric Balchunas, any ETF applicant whose fees are higher than BlackRock’s will have a challenge competing in the market.
Damn, the fee for BlackRock’s Bitcoin ETF will be 0.30% as per their just filed S-1. This is much cheaper than I predicted. Life just got a LOT tougher for everyone else. The ETF Terrordome is no joke. pic.twitter.com/RZrfO8x61s
— Eric Balchunas (@EricBalchunas) January 8, 2024
“BlackRock at 30bps is a potential instant destroyer of anyone much higher,” Balchunas added.
VanEck has announced a fixed fee of 0.25%, Fidelity’s is set at 0.39% while Invesco/Galaxy is at 0.59%. The Invesco/Galaxy ETF has a zero-fee structure during the first six months or until the product has $5 billion in assets.
Grayscale has the highest fee of 1.5%. According to analysts, the digital asset manager has a head start with Grayscale Bitcoin Trust (GBTC) holding about $27 billion of BTC and volumes approaching $500M daily. However, the high fee might still be a deterrent.
$GBTC traded close to half a billion today, which is more than 99% of the 3000 current ETFs, and reminder that they are bringing a (volume) gun to a knife fight if they launch with everyone else. That said, the 1.5% fee will act as a repellent. Another fascinating sub-plot. pic.twitter.com/506EG3PR7t
— Eric Balchunas (@EricBalchunas) January 8, 2024
Battle for Market Share Amid Looming Spot BTC ETF Approvals
According to a VanEck report, flows into spot Bitcoin ETFs will reach $1 billion within a few days after approval, rising to $2.4 billion during the first quarter of 2024.
All eyes are now on the SEC to determine whether the first spot Bitcoin ETF will launch in the US this week.
Also Read
- Grayscale And Ark Invest Among Latest Fund Managers To File 8-A Forms As Spot Bitcoin ETFs Inch Closer To Possible Approval
- Bitcoin ETF May Get SEC Green Light Today As Bitcoin Minetrix Presale Blasts Past $7.5m
- BitMEX Founder Arthur Hayes And Strategist Peter Schiff Warn That A Crypto Crash Might Follow Bitcoin ETF Approvals
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