Race to Approve Bitcoin ETFs Intensifies with Fee Wars

The anticipation for the United States Securities and Exchange Commission (SEC) decision on the spot Bitcoin exchange-traded fund (ETF) persists as numerous applicants submitted their final S-1 form changes on January 8.

The first to submit its final S-1 amendment was Valkyrie, followed by WisdomTree, BlackRock, VanEck, Invesco, Galaxy, Grayscale, ARK Invest, and 21Shares. Valkyrie was the first business to do so.

A significant number of the applicants have also included lower fees as part of the changes, which has raised the bar for competitiveness across the various ETF offers.

With no fee for the first six months and the first one billion dollars in assets, Bitwise’s exchange-traded funds (ETFs) have the lowest sponsor fee among those that have been filed so far. After that, they charge a fee of 0.24%.

Following this, ARK Invest and 21Shares both indicate that they will not charge any fees for the first six months or until they reach a total of one billion dollars in assets.

After that, they will begin charging a fee of 0.25%. As a market analyst for Bloomberg, Eric Balchunas referred to the reduction in the charge for ARK and 21Share, which went from 0.80% to 0.25%, as “breathtaking.”

According to Balchunas, “the fee wars are intense, but we’re talking about another level.” VanEck charges a fee of 0.25%, Franklin charges a cost of 0.29%, and Fidelity charges a fee of 0.39%.

Initially, BlackRock, a global asset manager, set the price for the iShare ETF at 0.20% for the first year, or until the first $5 billion was invested.

After that, BlackRock increased the fee to 0.30% as the ongoing fee. Wisdomtree has a fee of 0.5%; Galaxy Invesco offered the first six months of the investment with no fee, followed by a price of 0.59%; Valkyrie has a fee of 0.80%; and Hashdex has a sponsor fee of 0.90%.

These fees are on the higher end of the spectrum. Grayscale reduced its cost from 2% to its newly disclosed fee of 1.5%, which is currently the most expensive of the bunch.

Grayscale’s fee was previously 2%. Balchunas stated that it would be “interesting” to see if this leads cryptocurrency exchanges to respond with their fee cuts “before it’s too late.” Amid all the alterations made to spot Bitcoin exchanging funds, Balchunas made this statement.

In addition, Balchunas issued a reminder that the temporary fee waivers have not “moved the needle much” in the past and that advisors have a tendency to concentrate on the regular fees because they are long-term investors.

Given that all exchange-traded funds (ETFs) perform the same function, he did mention that it might be relevant in this particular scenario.

The commissioners of the Securities and Exchange Commission (SEC) are expected to vote on the final revisions, marking the next step in the decision-making process.

The markets anticipate that the ETF will make its debut on or around January 11th.