Skip to content
NewsBitcoinSECBlackRockBitwiseArk InvestVaneck

Bitcoin ETF Fee Competition Intensifies Ahead of Approval

Bitwise, ARK and Invesco are launching their Bitcoin ETFs with a lowballing fee of just 0% but are there hidden risks?

Table of Contents

Counting your chickens before they've hatched has long been frowned upon in folklore. Nonetheless, this hasn't stopped Bitcoin ETF applicants from discounting their fees to undercut competition, on the assumption that approval will be granted.

Bloomberg predicts a 90% chance of approval by 10 January, which is tomorrow at the time of writing.

Submitting amendments to their Bitcoin ETF registrations to the SEC, applicants disclosed their proposed fee structures.

Bitcoin ETF Approval: Bulls & Bears Debate
The fate of Bitcoin ETFs is expected to be determined this week but how optimistic is the market?

Bitwise Bitcoin ETF, ARK 21Shares Bitcoin ETF and Invesco Galaxy ETF are launching with a lowballing fee of just 0%.

BlackRock, the OG Bitcoin ETF applicant, proposed a fee of just 0.20% on the first $5 billion and 0.30% thereafter for its iShares Bitcoin Trust.

WisdomTree is placing a 0.5% fee on its trust whilst VanEck will impose a 0.25%. VanEck has also pledged 5% of its profits from the Bitcoin ETF to core developers at Brink.

An initial $10,000 donation to Brink was also made by VanEck to support its work.

"Your tireless dedication to decentralization and innovation is the cornerstone of the Bitcoin ecosystem, and we're here to support it—more details to come," said VanEck.

Issuers charge these fees for services including buying and storing assets. Investors incur the fee which is deducted from the fund's assets, ultimately impacting their final returns.

Custodia Bank CEO Caitlin Long warns that issuers charging lower fees to manage a fund could be hiding other risks. Securities lending is a common practice in no-fee funds, which poses additional risk for investors.

Low fees might attract traders and thus boost liquidity but issuers could discuss reduced fees with custodians, which could impact entities such as Coinbase, which is tasked with holding Bitcoin as collateral for ETF shares.

Why Approval of Bitcoin ETF is Not Important Any More
The approval of a spot Bitcoin ETF is not important any more, as it would not have a significant impact on the Bitcoin market or the adoption of Bitcoin. Also, reasons why the SEC has not approved Bitcoin ETF, what is the delay, and will the delay make any difference.

Latest

Blast Mainnet Launches, Boosting Ethereum L2

Blast Mainnet Launches, Boosting Ethereum L2

Now the seventh-largest blockchain and the second-largest Ethereum Layer 2 by total value deposited, Blast demonstrates the growing interest and demand for scalable and efficient solutions within the Ethereum ecosystem.