KEY POINTS
- Bitwise's spot Bitcoin ETF offers the lowest fee -- zero for the first 6 months or until the fund hits $1 billion in assets, and then 0.24%
- ARK/21Shares' spot Bitcoin ETF offers zero fees for the first 6 months or until the fund hits $1 billion in assets, and then 0.25%
- BlackRock offers a 0.2% fee for the first 12 months or until the fund reaches $5bn in assets and then 0.3%
The fee war of spot Bitcoin exchange-traded fund (ETF) has already started. So far, two proposals have revealed they offer the two lowest fees among issuers, with zero-fee in the first six months.
With the final S-1 forms of some hopeful spot Bitcoin ETF issuers already submitted to the U.S. Securities and Exchange Commission (SEC), the industry now has an idea of which crypto investment vehicle will offer the lowest fee.
Based on the latest filings, Bitwise's spot Bitcoin ETF offers zero fees for the first six months or until the first billion in assets, and then charge 0.24% after.
Coming in close second is ARK/21Shares' spot Bitcoin ETF, which like Bitwise also offers zero fees for the first six months or until the fund hits $1 billion in assets and then a fee of 0.25%.
On the third spot is BlackRock, offering a 0.2% fee for the first 12 months or until the fund reaches $5 billion in assets and then 0.3% after the first condition has been met.
VanEck strategy advisor Gabor Gurbacs commented on the pricing structures of spot Bitcoin ETF, noting this would greatly benefit holders.
"Bitcoin ETFs are coming in with pricing structures in the low double digit range and many with waivers and discounts," Gabor said. "This clearly benefits the holders. However, it scares me when little to no money is made. Issuers will look elsewhere to make money (securities lending, trading, etc). I personally just like an upfront higher fees with clear and sustainable incentives. If possible a deep look into total cost of ownership. But that's not how the ETF pricing battles go. People like to see low numbers."
Bitcoin ETFs are coming in with pricing structures in the low double digit range and many with waivers and discounts.
— Gabor Gurbacs (@gaborgurbacs) January 8, 2024
This clearly benefits the holders. However, it scares me when little to no money is made. Issuers will look elsewhere to make money (securities lending, trading,…
Custodia Bank founder and CEO Caitlyn Long, however, waved a red flag on the kind of pricing of spot Bitcoin ETF issuers, saying, "WHEN FEES ARE LOWER THAN COSTS, please please please ask yourself how the asset manager is making money managing the fund. With no-fee funds, the answer is usually securities lending—a practice that can pose A LOT of hidden risk to investors. What's really going on here?"
🚨🚨🚨WHEN FEES ARE LOWER THAN COSTS, please please please ask yourself how the asset manager is making money managing the fund. With no-fee funds, the answer is usually securities lending—a practice that can pose A LOT of hidden risk to investors. What‘s really going on here?🤔 https://t.co/F04OV2z6wC
— Caitlin Long 🔑⚡️🟠 (@CaitlinLong_) January 8, 2024
Bloomberg Intelligence ETF analyst James Seyffart, however, pointed out the prices were not yet final, and speculated that they can drop even further.
Keep in mind this isn't finalized so i would not be surprised to see them drop even further
— James Seyffart (@JSeyff) January 8, 2024
"Keep in mind this isn't finalized so I would not be surprised to see them drop even further," Seyffart said.
