Bitcoin ETF Applicants Reveal Proposed Fees
BlackRock, VanEck, and WisdomTree, applicants for Bitcoin exchange-traded funds (ETFs), have disclosed the fees for their proposed offerings in amended filings with the US Securities and Exchange Commission (SEC). BlackRock has set its fee at 0.2% for the first year, increasing to 0.3% after reaching $5 billion in assets. WisdomTree has chosen a higher fee of 0.5%, while VanEck has opted for a 0.25% fee and pledged to give 5% of profits to Bitcoin core developers at Brink. Other firms, including Ark Invest/21Shares, Invesco, and Fidelity, have also submitted amended filings, with Ark Invest lowering its fee from 0.8% to 0.25%.
Analyst Comments on ETF Fees
Bloomberg Intelligence analyst Eric Balchunas commented on Twitter that BlackRock’s 0.3% fee is “much cheaper than I predicted” and noted that “Life just got a LOT tougher for everyone else.” This highlights the competitive nature of ETF fees and how lower fees tend to prevail.
The Race for a Bitcoin ETF
Although the SEC has historically rejected all applications for spot Bitcoin ETFs, BlackRock’s entry into the market in 2023 raised hopes for approval. The momentum increased after Grayscale’s court victory in August 2023, which required the SEC to review its application to convert its Grayscale Bitcoin Trust product into an ETF. With a deadline approaching, there is a possibility that multiple spot Bitcoin ETF applications could be approved simultaneously.
Market Predictions
Bloomberg Intelligence’s Balchunas raised the odds of the SEC approving a spot Bitcoin ETF in January to 95%. However, the prediction market Polymarket shows a more cautious stance among market participants, with an 83% chance of approval by January 15. A Bitwise poll revealed that only 39% of financial advisors surveyed believe a spot Bitcoin ETF will be available to US investors in 2024.
Hot Take: The Competition Intensifies as Bitcoin ETF Fees Are Revealed
The disclosure of fees by Bitcoin ETF applicants BlackRock, VanEck, and WisdomTree has intensified the race for approval. BlackRock’s lower-than-expected fee has put pressure on other contenders. The SEC now faces the decision of approving multiple spot Bitcoin ETF applications before the deadline. While there is optimism for approval, market predictions vary, with some showing high chances of success and others being more cautious. The outcome will have significant implications for investors seeking exposure to Bitcoin without the complexities of owning and managing the cryptocurrency directly.
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