Bitwise Lowers Fee to 20 Basis Points, Undercutting Competitors
Grayscale’s fee remains at 1.5%, the highest by far of any issuers.
The competition on spot bitcoin ETF fees heated up on Tuesday, as Bitwise Asset Management, Valkyrie, Invesco and WisdomTree all submitted fresh amendments lowering the costs tied to their products from those listed in filings earlier this month.
The lowest fee so far is from Bitwise, which cut its rate from 24 basis points to 20 basis points Tuesday morning. The issuer is also including a six-month waiver period with zero fees. BlackRock, the world’s largest asset manager, is offering a 12-month period of a 0.20% fee before raising it to 0.30%.
“It’s a huge win for investors, because they only benefit from that price competition—those fees are coming directly out of returns,” said Morningstar analyst Bryan Armour. “There’s really no benefit from going with a higher fee issuer, because at the end of the day, you're just getting bitcoin exposure,” he added.
Grayscale Investments has proposed by far the highest fee on its Grayscale Bitcoin Trust (GBTC), which it is planning to convert into an ETF. While the trust’s fee previously was 2%, the firm lowered it to 1.5%.
As issuers approach the expected Wednesday approval, firms are working rapidly with the Securities and Exchange Commission (SEC) to amend filings.
Spot Bitcoin ETF Race
While issuers have been proposing an ETF that tracks the price of bitcoin for a decade, the agency has rebuffed multiple applications. But BlackRock’s spot BTC application last June, and Grayscale’s win in a federal court case against the SEC 10 weeks later, spurred the agency to reconsider its opposition and work with issuers.
Activity has peaked in recent weeks with a flurry of meetings between SEC officials and applicants and of amendments addressing the agency’s biggest concerns, particularly about investor protections.
The recent fee amendments have suggested that the process has reached an end game. Bloomberg ETF analysts Eric Balchunas and James Seyffart have predicted for weeks that the SEC would approve multiple applications no later than Jan. 10.
“The fact that [issuers] are working so closely and so quickly with SEC is an indication that they're trying really hard not to have any delays,” Armour said.
Contact Lucy Brewster at [email protected].
