Fidelity and Galaxy announce fees for proposed Bitcoin ETFs: Report
The issuers of two proposed Bitcoin exchange traded funds have reportedly set the fees they will charge if their ETFs are approved. According to a report from Fortune, Fidelity Investments will charge 0.39% per year to holders of its Wise Origin Bitcoin Trust and Galaxy/Invesco will charge 0.59% per year for its BTCO fund. In Galaxy/Invesco’s case, the fee will be waived for the first six months of the fund’s operation. The report cited a Dec. 29 court filing as the source of the information.
Invesco/Galaxy is in and here's a whopper: it will be waiving fee for first six months AND for first $5b in assets, APs named as well, Virtu and JPMorgan (again lol). Another horse in. Are we having fun yet? pic.twitter.com/mDUOOSnA29
— Eric Balchunas (@EricBalchunas) December 29, 2023
The report also said Jane Street Capital will be the “authorized participant” for the Bitcoin ETFs of Fidelity, WisdomTree, and Valkyrie, implying that Jane Street Capital will be allowed to arbitrage differences in price between these funds’ shares and Bitcoin itself. Valkyrie also named Cantor Fitzgerald as a second authorized participant. Galaxy/Invesco and BlackRock have named both JPMorgan and Virtu as their authorized participants.
The ETFs will use a “cash” model for creation and redemption, which means that authorized participants will not purchase Bitcoin and deposit it into the funds. Instead, they will deposit the cash equivalent for the amount of Bitcoin they want to deposit, which will then be used by the fund to purchase BTC. The US Securities and Exchange Commission (SEC) has pushed for this solution, claiming that it doesn’t want to allow broker-dealers to handle Bitcoin, the report stated.
Related: Grayscale’s latest spot Bitcoin ETF amendment omits authorized participants
Bitcoin holders have been waiting for years for a spot ETF to be approved in the UnitedStates, as some believe it will introduce new investors to Bitcoin and allow its price to rise further. The SEC has rejected several Bitcoin ETFs in the past. But the tide appeared to be turning in August, when Grayscale won a lawsuit against the agency . In that decision, a U.S. Court of Appeals ruled that the SEC had arbitrarily rejected Grayscale’s application for a spot Bitcoin ETF and must reconsider its decision.
Since that time, multiple new applications and revisions for Bitcoin ETFs have been filed , including ones from Fidelity, WisdomTree, Invesco Galaxy, and Bitwise.
The SEC has not made an official announcement of any Bitcoin spot ETF approval as of yet.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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