Invesco, WisdomTree Cut Bitcoin ETP Fees as U.S. Price Clash Hits Europe

WisdomTree and Invesco became the latest issuers to slash fees on their physical bitcoin exchange-traded products (ETP) as they responded to the introduction of cheaper spot bitcoin ETFs in the U.S.

The U.S. financial services giants announced their cuts on Thursday. 

First, Invesco said it was cutting the TER on the Invesco Physical Bitcoin ETP (BTIC) from 0.99% to 0.39%, placing BTIC closer to Europe’s cheapest physical bitcoin ETP—the 21Shares Bitcoin Core ETP (CBTC)—which has a total expense ratio (TER) of 0.21%. Then asset manager WisdomTree cut the total expense ratio (TER) on the WisdomTree Physical Bitcoin ETP (BTCW) from 0.95% to 0.35%, as part of a wider fee reduction across eight of its crypto ETPs.

The moves followed nine days after the U.S. Securities and Exchange Commission approved 11 spot bitcoin ETF applications, igniting a fierce competition on fees in Europe as issuers hope to capitalize on anticipated, increased institutional demand. 

Gary Buxton, Invesco's head of EMEA and APAC ETFs and indexed strategies noted that prices of the "the newly-launched U.S. products were "considerably lower than those available on the existing European-domiciled bitcoin trackers."

"Such a fundamental change in the market dynamics in the U.S. will, naturally, impact the EMEA-based institutional and professional investors for whom our Invesco Physical Bitcoin ETP is intended. In light of this, we have chosen to reduce the fee on our EU domiciled Invesco Physical Bitcoin product."

The U.S.-listed Invesco Galaxy Bitcoin ETF (BTCO) has a TER of 0% for the first six months or up to $5 billion in assets, followed by a 0.30% fee.

BTCW Undercuts BTIC

While WisdomTree's BTCW undercuts BTIC by four basis points (bps), it is still more expensive than Europe’s cheapest physical bitcoin ETP—the 21Shares Bitcoin Core ETP (CBTC)—which has a TER of 0.21%.

Fee reductions will also occur across WisdomTree’s Ethereum, Solana, Cardano and Polkadot ETPs as well as three crypto basket products.

Chart 1: WisdomTree's crypto ETP fee cuts

Source: WisdomTree

"The launch of spot bitcoin ETFs in the U.S. is helping the crypto market to evolve as the asset class continues to stake a claim for a place in client portfolios," said Alexis Marinof, head of Europe at WisdomTree.

Despite the reduction, BTCW is still more expensive than its U.S. counterpart.

ETF Issuers Lowered Fees

The WisdomTree Bitcoin Fund has a 0% fee for the first six months for up to $1 billion in assets, at which point TER will rise to 0.29%.

Multiple bitcoin ETF providers lowered their fees in the run-up to the SEC's approval, while also offering fee waivers as they vied for assets under management.

Europe’s cheapest bitcoin ETP is the Valour Bitcoin Zero SEK (BTC0E) with a management fee of 0%, though this is synthetically replicated.

Crypto ETPs saw inflows of $2.3 billion last year, up from $830 million in 2022—of which bitcoin made up 87% of new assets—boosted by investor sentiment surrounding a potential spot bitcoin ETF approval in the U.S.