- In light of growing competition, BlackRock has reduced the sponsor fee for a potential spot Bitcoin ETF from 0.3% to 0.25%.
- Bitwise plans to offer the lowest fee among competing products, with a fee of 0.2% and free for the first $1 billion or the first 6 months.
- On Tuesday, Fidelity reduced its fee from 0.39% to 0.25%. It also plans to waive the fee for market participants until July 31.
Investment giant BlackRock has further reduced its ETF fee today for a potential spot Bitcoin ETF!
BlackRock Lowers ETF Fee Further
In the face of growing competition, BlackRock has reduced the sponsor fee for a potential spot Bitcoin ETF from 0.3% to 0.25%. The investment giant has also lowered the temporary discount for the first $5 billion of assets during the first 12 months of the launch from 0.2% to 0.12, according to the S-1 form.
Bloomberg ETF analyst Eric Balchunas stated, “BlackRock has now lowered the spot Bitcoin ETF fee to 0.25% (and 0.12% for the first $5 billion). They are really trying to crush others; they are trying to crush others before they are even born, they are ruthless. ARK also reduced from 0.25% to 0.21%. Bitwise is planning the lowest at 0.20%.”
Ark Invest/21Shares reduced its fee from 0.25% to 0.21% and continues to waive fees for the first 6 months or until assets reach $1 billion, according to the S-1 form. Bitwise plans to offer the lowest fee among competing products, with a fee of 0.2% and free for the first $1 billion or the first 6 months.
On Tuesday, Fidelity reduced its fee from 0.39% to 0.25%. It also plans to waive the fee for market participants until July 31. Many other competing issuers also reduced their fees yesterday – Valkyrie from 0.80% to 0.49%, Invesco Galaxy from 0.59% to 0.39%, and WisdomTree from 0.50% to 0.30%. Many providers are also offering fee waivers for a limited time.
Why are the fees so low?
Competitors attempting to launch the first spot Bitcoin ETFs in the U.S. are trying to lower fees to compete against the potential approval from the U.S. Securities and Exchange Commission (SEC). Offering low fees to attract market share in the early days is considered a strategy that can be profitable in the future.
VanEck anticipates $1 billion in inflows in the first few days of spot Bitcoin ETFs and expects $2.4 billion in inflows within a quarter. Galaxy forecasts $14 billion in inflows within the first year. Looking further ahead, Bitwise expects the market size to be approximately $72 billion within five years.
This comes after the compromise of the SEC’s X account, which posted a fake spot Bitcoin ETF approval message. The SEC plans to collaborate with law enforcement to investigate the security breach. However, industry experts expect approvals to come today and products to start trading tomorrow.
