BTC Spot ETF - War on Fees.
The United States Securities and Exchange Commission (SEC) is set to make a crucial decision on spot Bitcoin exchange-traded funds (ETFs), with the market eagerly awaiting the outcome as Bitcoin hovers around $45,913.
Multiple applicants, including Valkyrie, WisdomTree, BlackRock, VanEck, Invesco, Galaxy, Grayscale, ARK Invest, and 21Shares, have submitted final S-1 form amendments as of Jan. 8.
Lower fees have become a focal point among applicants, intensifying the competition. Notably, Bitwise leads with no fees for the first six months and the initial $1 billion in assets, followed by a 0.24% fee. ARK Invest and 21Shares also offer fee waivers initially, later implementing a 0.25% fee.
Eric Balchunas, a Bloomberg market analyst, describes the drop in fees by ARK and 21Shares from 0.80% to 0.25% as "breathtaking," signaling fierce competition in what he calls "fee wars."
Various fee structures include VanEck at 0.25%, Franklin at 0.29%, Fidelity at 0.39%, BlackRock starting at 0.20% for the first 12 months, then increasing to 0.30% as an ongoing fee.
On the higher end, Wisdomtree charges 0.5%, Galaxy Invesco begins with no fees for the first six months, followed by a 0.59% fee, Valkyrie sets a 0.80% fee, and Hashdex has a 0.90% sponsor fee.
Grayscale reduced its fee from 2% to 1.5%, currently the highest among the applicants.
Analyst James Seyffart advises caution, emphasizing that these fee structures are not finalized, anticipating further adjustments.
Eric Balchunas speculates on the impact of fee changes, wondering if cryptocurrency exchanges will respond with fee cuts.
The final amendments signal the approaching SEC commissioner vote, with markets expecting the potential ETF debut around Jan. 11.