Spot Bitcoin ETF fee war begins, issuers amend S-1 filings with lower sponsor fees
The anticipation for the decision from the United States Securities and Exchange Commission (SEC) on the spot Bitcoin ( BTC ) exchange-traded fund (ETF) continues as multiple applicants filed their final S-1 form amendments on Jan. 8.
Valkyrie was the first company to file its final S-1 amendment, followed by WisdomTree, BlackRock, VanEck, Invesco and Galaxy, Grayscale, and ARK Invest and 21Shares.
Among the amendments, many of the applicants have also included lower fees, raising the bar of competitiveness between the various ETF offerings.
The lowest Sponsor Fee for the currently filed ETFs is from Bitwise, with no fee for the first six months and the first $1 billion in assets, followed by a 0.24% fee. This is followed by ARK Invest and 21Shares also listing no fee for the first six months or until $1 billion in assets, after which it will enforce a fee of 0.25%.
But wait, ARK just dropped their fee to 0.25% in an S-1 filed 20 minutes after BlackRock’s. Told y’all the fee war would break out bf they even launched. And this is w out Vanguard on the mix. Damn. pic.twitter.com/QVRhEXzLey
— Eric Balchunas (@EricBalchunas) January 8, 2024
The Bloomberg market analyst Eric Balchunas called the drop in ARK and 21Share’s fee from 0.80% to 0.25% “breathtaking.” Balchunas said, “the fee wars are intense, but that’s another level.”
VanEck listed a 0.25% fee, Franklin a 0.29% fee and Fidelity a 0.39% fee.
The global asset manager BlackRock set its fee for the iShare ETF at 0.20% for the first 12 months or until the first $5 billion, then hiked it up to 0.30% as the ongoing fee.
BLACKROCK’S FEE is finally listed
— Katie Greifeld (@kgreifeld) January 8, 2024
final fee is 30bp,
BUT 20 bps in first 12 months or until the first $5 billion in assets
that’s the new low-water mark pic.twitter.com/mVMNP51ffT
On the higher end of the fees, Wisdomtree comes in at 0.5%, Galaxy Invesco offered the first six months with no fee, followed by a 0.59% fee, Valkyrie has a 0.80% fee and Hashdex with a sponsor fee of 0.90%.
Grayscale dropped its fee from 2% to its newly listed fee of 1.5%, which currently comes in as the most expensive of the pack.
Research and market analyst James Seyffart posted on X, formerly Twitter, to be mindful that these are not finalized and said he wouldn’t be surprised by even more fee drops.
Amid all the revisions to spot Bitcoin ETF Balchunas said it would be “interesting” to see if this influences cryptocurrency exchanges to respond with their own fee cuts “before it's too late.”
Balchunas also posted a reminder that the temporary fee waivers historically haven’t “moved the needle much” and that advisors tend to focus on the regular fees because they are long-term investors.
However, he did say it could possibly matter in this case given that the ETFs all do the same thing.
One quick note on the temporary fee waivers that we’re seeing in the bitcoin ETFs. Historically this hasn’t moved needle much (one ETF back in day actually paid you to invest in it until it reached certain aum mark but no one cared). Advisors focused on regular fee since they…
— Eric Balchunas (@EricBalchunas) January 8, 2024
As the final amendments come in, the next stage in the decision-making process is anticipated to be a vote by SEC commissioners. Markets have been forecasting the debut of the ETF on or around Jan. 11.
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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