Asset Management Firms Slash Fees on European Bitcoin ETFs
Asset management firms in Europe have significantly reduced fees on their Bitcoin exchange-traded funds (ETFs) in response to the competitive landscape created by similar products available to U.S. investors. Gary Buxton, Invesco’s head of ETFs for Europe, the Middle East, Africa, and Asia Pacific, highlighted that many ETF providers have adjusted their fees for spot Bitcoin ETFs to stay competitive with the U.S. market.
Ark Investment Management, led by Cathie Wood, initially planned to charge a 0.8% fee for its spot Bitcoin ETF but ultimately launched it with no fees for the first six months or until assets reach $1 billion. Meanwhile, BlackRock’s investors will pay 0.25%, with early investors accessing it at 0.12% for the first year until assets reach $5 billion.
“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.”
– Alexis Marinof, WisdomTree Europe Head
Competition Forces Fee Reductions
Industry executives note that the U.S. “price wars” have settled around 30 basis points and suggest that providers below this threshold may struggle to be profitable unless they attract significant assets under management. This could lead to potential closures in the medium term. Grayscale Investments CEO Michael Sonnenshein previously predicted that only a handful of Bitcoin ETFs will survive long-term.
American Asset Managers Follow Suit
To remain competitive with other markets, WisdomTree and Invesco, American asset managers, have slashed fees on their European-listed spot Bitcoin ETFs by over 60%. WisdomTree’s Physical Bitcoin ETF will see fees drop from 0.95% to 0.35%, while Invesco’s Physical Bitcoin ETF fees will decrease from 0.99% to 0.39%. These fee reductions are expected to take effect in February.
In addition, Invesco will waive fees for its U.S. product for the first six months or until it reaches $5 billion, aligning with the newly announced fee on its European product.
The U.S. Securities and Exchange Commission approved multiple spot Bitcoin ETFs on January 10. However, after the launch, SEC Chair Gary Gensler clarified that the approval did not signify endorsement of Bitcoin.
Hot Take: Fee Reductions Reflect Intense Competition in the Bitcoin ETF Market
The significant fee reductions by asset management firms on their European Bitcoin ETFs highlight the intense competition within the market, fueled by similar offerings available to U.S. investors. The U.S. market has seen price wars settle around 30 basis points, prompting providers to lower their fees to attract assets under management and remain profitable. Grayscale Investments CEO Michael Sonnenshein’s prediction that only a few Bitcoin ETFs will survive in the long run adds weight to this reality.
By
By
By
By
By
By