In the race to gain market share in the initial months of their proposed funds, applicants for Spot Bitcoin ETFs are competing fiercely on fee schedules. This is contingent on the approval of such exchange-traded funds. Several applicants, including BlackRock, Fidelity, and VanEck, have submitted updated S-1 forms today.
Some of these reveal their proposed fees for the first time, while others have adjusted their fees in response to the competition. Bitwise leads the group, offering no fees for the first six months or until it accumulates the first $1 billion in assets. After this period, its fee will be 0.24%, the lowest among all.
Ark/21Shares is a close second, also offering no fees for the first six months or until the fund reaches $1 billion in assets. After this, its fee will be 0.25%, just slightly higher than Bitwise. This is a significant reduction from its initially proposed fee of 0.8%.
BlackRock is in third place, with fees as low as 0.2% for the first 12 months or until the fund reaches $5 billion in assets. After this, the fee will increase to 0.3%, which is among the lowest.
According to Eric Balchunas, Temporary Fee Waivers Won’t Have Much Impact
Bloomberg ETF analyst Eric Balchunas commented on the fee war, stating it had begun even before the launch, and this was without Vanguard in the mix.
VanEck has set a fixed fee of 0.25%, which will be among the lowest once the temporary fees for competing ETFs have ended. Following this, Fidelity’s fee is 0.39% and Invesco/Galaxy’s is 0.59%. Invesco/Galaxy is also offering no fees for the first six months or until the first $5 billion in assets.
Balchunas added a quick note on the temporary fee waivers seen in the Bitcoin ETFs. He mentioned that historically, these haven’t made much difference (one ETF even paid investors to invest in it until it reached a certain asset mark, but it didn’t attract attention).
Advisors tend to focus on the regular fee as they are long-term investors. However, given that all these ETFs offer the same thing, the temporary fee waivers might make a difference this time. Only time will tell.
