Spot Bitcoin ETF Hopefuls Unveil Wide-Ranging Fees
In Invesco’s proposed model, fees for the fund would be free for the first six months.
With Bloomberg analysts forecasting a 90% probability of the Securities and Exchange Commission (SEC) approving a spot bitcoin ETF by Jan. 10, issuers have already begun jockeying for market share through their pricing.
Fidelity, Invesco, Fidelity and Valkyrie, among others, have released their fee structures in recent filings with the SEC. So far, these fees have ranged widely from Valkyrie’s 0.8% to Fidelity’s more recently introduced 0.39%.
Funds’ fees, which are historically competitive in the ETF industry, will be key in grabbing investor attention.
Regulatory approval would end a roughly decade-long odyssey for spot bitcoin ETFs, which track the price of the world’s largest cryptocurrency by market value. The SEC rejected multiple such products in 2022 and 2023, but a June 15 filing by BlackRock, the world’s largest asset manager, rekindled interest among a number of financial services giants, who in the immediate aftermath submitted first-time filings or refiled previously rejected applications.
A watershed court decision in August separately forced the agency to reconsider Grayscale’s application to convert its bitcoin trust into an ETF. The SEC had previously approved ETFs that track crypto futures, which speculate on bitcoin’s future price movement.
Spot Bitcoin ETF Fee Range
In a Dec. 29 update to its prospectus, Invesco disclosed that it would waive fees for the first six months of the ETF’s operation and for the first $5 billion it accumulates in assets. After reaching those two milestones, Invesco would charge 0.59%. Fidelity has so far disclosed the lowest fee, 0.39%.
For ETF investors, low fees are often a critical draw, separating the investment vehicle from mutual funds. Yet as the ETF industry grows and issuers use more complex trading techniques, the cost of operating ETFs has been higher than for broad index funds.
The current expense ratio for cryptocurrency ETFs on the market, including bitcoin futures funds, is 2.31%, according to etf.com data.
Contact Lucy Brewster at [email protected].
