BlackRock Reduces Sponsor Fee for Potential Bitcoin ETF
BlackRock, the investment giant, has decided to lower its sponsor fee for a potential spot bitcoin ETF from 0.3% to 0.25%. This move is in response to increased competition in the market. Additionally, BlackRock has reduced its temporary discount from 0.2% to 0.12% for the first $5 billion of assets within the first year of launch.
Other Competitors Lower Fees
Apart from BlackRock, other competitors in the market have also reduced their fees. Ark Invest/21Shares has cut its fee from 0.25% to 0.21% and is offering zero fees for the first six months or until $1 billion in assets. Bitwise plans to have the lowest fee among competing products with a 0.2% fee and zero fees for the first six months or until the first $1 billion in assets.
Fidelity has dropped its fee from 0.39% to 0.25%, while Valkyrie, Invesco Galaxy, and WisdomTree have also lowered their fees.
Reasons Behind the Fee Reductions
The reason behind these fee reductions is that U.S. contenders aiming to launch spot bitcoin ETFs are trying to attract market share by offering low fees before potential approval from the Securities and Exchange Commission (SEC). The hope is that attracting customers with low fees initially will pay off in the long run.
Predicted Inflows and SEC Breach
VanEck predicts that spot bitcoin ETFs will see $1 billion in inflows within a few days and $2.4 billion within a quarter. Galaxy anticipates $14 billion in inflows within the first year, while Bitwise expects a market size of $72 billion within five years. Meanwhile, the SEC’s X account was compromised, leading to a fake spot bitcoin ETF approval message. The SEC plans to investigate the breach with the help of law enforcement.
Hot Take: Approvals Expected Despite Breach
Despite the breach, industry experts anticipate that the SEC will still approve spot bitcoin ETFs today, and trading is expected to commence tomorrow.
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