In a recent development, several firms have cut down their proposed fees, a move that is seen as a response to the escalating industry competition and the anticipation of the U.S. Securities and Exchange Commission’s (SEC) decision on spot Bitcoin ETFs.
As the SEC deadline draws near, various applicants including Valkyrie, WisdomTree, BlackRock, VanEck, Invesco, Galaxy, Grayscale, and ARK Invest have revised their fees to gain a competitive edge. Fidelity has reduced its fees from 0.39% to 0.25% bps and is offering a fee waiver of 0% through July 31, 2024. Bitwise is charging a fee of 0% for the first six months and the first $1 billion in assets, followed by a 0.20% fee.
ARK Invest and 21Shares have also reduced their fees from 0.25% to 0.21%, maintaining a zero fees policy for six months or until the total assets reach $1 billion. BlackRock has adjusted its sponsor fee for its potential spot Bitcoin ETF to 0.25%, a reduction from the previous 0.3%. The investment giant has also lowered its temporary discount for the first $5 billion of assets in the initial 12 months from launch to 0.12%, down from 0.2%.
WisdomTree has reduced its fee from 0.5% to 0.30%, with Galaxy Invesco lowering its fee from 0.59% to 0.39%. Valkyrie has introduced a three-month fee waiver, reducing its fee from 0.80% to 0.49%. Meanwhile, Hashdex has maintained its sponsor fee at 0.90%, and Grayscale has lowered its fee from 2% on January 8 to 1.5%, making it the pricier option among the group.
As the fee wars intensify, James Seyffart warns that these fees still need to be finalized, leaving room for further adjustments. Amidst the ongoing adjustments, Bloomberg senior ETF analyst Eric Balchunas described the current situation as similar to compressing two years’ worth of fee wars into just a couple of days. He emphasized that while such battles can be challenging for issuers, they create a favorable environment for investors.
The fee wars have also sparked various theories about the motivations behind the fee cuts. Nic Carter sees the trend of bargain-basement fees as a sign of “massive expectations” from issuers regarding the volume of inflows they anticipate. Peter Atwater offers a contrasting perspective. He suggests that issuers engaging in an aggressive fee war are conducting an extensive asset grab, even if it means sacrificing profitability. Atwater also noted that organizations typically wait to assess their sales potential before resorting to price slashes.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | James Seyffart, Peter Atwater, Nic Carter, Eric Balchunas |
| Companies | Galaxy, BlackRock, Invesco, Bloomberg, U.S. Securities and Exchange Commission, 21Shares, VanEck, Hashdex, ARK Invest, Fidelity, Bitwise, Valkyrie, Grayscale, WisdomTree |
| Currencies | Bitcoin |
| Securities | None |
