Four Bitcoin ETF hopefuls slash fees before funds even launch

The race to the bottom on fees among prospective spot Bitcoin exchange-traded fund (ETF) issuers picked up speed with at least four companies slashing their costs.

Invesco, Bitwise, Valkyrie and WisdomTree lowered fees in their spot Bitcoin ETF applications, according to updated filings with the United States Securities and Exchange Commission (SEC). Bitwise, which already had the lowest final fee of 24 basis points, dropped it even lower to just 20 basis points in Tuesday’s (Jan 9) filing.

The cuts come ahead of the SEC’s highly anticipated on Wednesday decision to take action on the Ark 21Shares Bitcoin ETF application. Industry watchers anticipate that the US regulator will make a decision on all the applicants at once, adding extra urgency to the fee competition as issuers attempt to gain an edge in what could be a crowded race.

“It’s breathtaking how fast the fees got so low before the race even started,” said Eric Balchunas, Bloomberg Intelligence senior ETF analyst. “It’s like two years worth of fee wars have been condensed into a couple of days.”

Invesco, like Bitwise, is offering an initial sweetener of zero fees for the first six months or until the fund reaches a certain asset threshold. After that, the fund will charge 39 basis points, versus 59 basis points previously. Valkyrie and WisdomTree dropped their expenses to 0.49 per cent and 0.3 per cent, respectively, versus 0.8 per cent and 0.5 per cent in prior applications. BLOOMBERG