After many years of waiting, investors will finally see the launch of the first-ever spot Bitcoin (BTC) exchange-traded fund (ETF) in history. The market was immediately flooded not with one or five but nearly a dozen such investment products that should become available today (Thursday) on the NYSE, NASDAQ, and CBOE.
Although their operating principles are very similar, they differ in terms of the transaction fees they offer. Several issuers changed the fee structure at the last minute, and some offer limited-time "promotions."
Which Bitcoin ETF Offers the Lowest Fees
Analysts anticipate a fierce battle for a share of the $50 to $100 billion expected to flow into these new ETFs. Issuers began to compete on fees to capture a larger market share in this competitive environment.
For instance, BlackRock, the largest issuer, reduced its iShares Bitcoin Trust (IBIT) prices from 0.3% to 0.2% for the first twelve months or for the first $5 billion in IBIT ETF trades.
Finance Magnates’ infographic shows that four issuers, namely Bitwise, ARK Invest, Invesco, and WisdomTree, have decided to cut fees to zero for six months, followed by a rate of 0.2 to 0.3%, to attract more capital.
Hashdex and Grayscale Investments did not participate in this fee war. Hasdhex’s Bitcoin ETF will charge 0.9%, while Grayscale's Bitcoin Trust will have a fee of 1.5%.
Coinbase is the custodian for most of these instruments, with a few exceptions like VanEck using Gemini, Hasdhex using BitGo, and Fidelity using its own solutions.
“This is a pivotal moment that legitimizes Bitcoin’s future,” said LMAX Group’s CEO, David Mercer, after the SEC approved 11 BTC ETFs applications. You can read about the broader industry reaction here.
First they ignore you, then they laugh at you, then they fight you, then they make you wait 10 years...then you WIN!
— Cameron Winklevoss (@cameron) January 10, 2024
Spot Bitcoin ETFs Approved by the SEC
On Wednesday evening, the US Securities and Exchange Commission (SEC) announced that it had approved 11 applications for spot BTC ETFs, which had been waiting in line for months.
The approval was not without controversy. The day before, the SEC’s social media account was compromised and a fake announcement appeared on the approval of new instruments, causing a momentary euphoria in the cryptocurrency market.
The @SECGov X account was compromised, and an unauthorized post was posted. The SEC has not approved the listing and trading of spot bitcoin exchange-traded products.
— U.S. Securities and Exchange Commission (@SECGov) January 9, 2024
The actual approval occurred a day later, and 11 new instruments will soon be available on the NYSE Arca, NASDAQ, and Cboe BZX Exchange, including products from ARK Invest, Fidelity, Franklin Templeton, VanEck, BlackRock, and Valkyrie.
This week, issuers submitted their final updates to their applications to the SEC, indicating intense competition to lower fees.
This article was written by Damian Chmiel at www.financemagnates.com.
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