In a strategic move responding to fierce industry competition and heightened anticipation surrounding the U.S. Securities and Exchange Commission’s (SEC) decision on spot Bitcoin ETFs, several firms are adjusting their proposed fees. The revisions, unveiled in the latest versions of their S-1 forms submitted to the SEC, aim to gain a competitive edge.
Fee Adjustments by Key Players
As the SEC deadline looms, significant applicants such as Valkyrie, WisdomTree, BlackRock, VanEck, Invesco, Galaxy, Grayscale, and ARK Invest are making noteworthy fee reductions.
- Fidelity has reduced its fees from 0.39% to 0.25% and offers a fee waiver of 0% through July 31, 2024.
- Bitwise is charging a fee of 0% for the first six months and the initial $1 billion in assets, followed by a 0.20% fee.
- ARK Invest and 21Shares have slashed their fees from 0.25% to 0.21%, maintaining a zero-fee policy for six months or until total assets reach $1 billion.
Notable Fee Changes
- BlackRock adjusted its sponsor fee for a potential spot Bitcoin ETF to 0.25%, down from the previous 0.3%.
- WisdomTree reduced its fee from 0.5% to 0.30%, with Galaxy Invesco lowering its fee from 0.59% to 0.39%.
- Valkyrie introduced a three-month fee waiver, reducing its fee from 0.80% to 0.49%.
- Hashdex maintained its sponsor fee at 0.90%, while Grayscale lowered its fee from 2% on January 8 to 1.5%, positioning itself as a pricier option among the group.
Also Read: Cryptocurrency Enthusiasts Await Bitcoin Bull Run as Wall Street Prepares for Spot ETF
Industry Sentiment and Analysis
Bloomberg senior ETF analyst Eric Balchunas views the current scenario as compressing two years’ worth of fee wars into just a couple of days. While challenging for issuers, these battles create a favorable environment for investors.
Amidst the fee adjustments, various theories emerge about the motivations behind the cuts. Nic Carter interprets the trend of bargain-basement fees as a sign of “massive expectations” from issuers regarding anticipated inflow volumes.
In a contrasting view, Peter Atwater suggests that issuers engaging in an aggressive fee war are conducting an extensive asset grab, even at the expense of profitability. He emphasizes that organizations typically wait to assess their sales potential before resorting to price slashes.
As James Seyffart cautions, these fee adjustments are not finalized, leaving room for further changes. The ongoing fee wars present a dynamic landscape with implications for both issuers and investors alike.
