Topline
Several applicants seeking to launch bitcoin exchange-traded funds cut their proposed fees on the ETFs, as the battle for control of the much-anticipated asset class heats up ahead of U.S. regulators’ expected approval of the first-of-their-kind crypto funds Wednesday.
Key Facts
BlackRock and Ark Invest slashed their fees for their proposed spot bitcoin ETFs on Wednesday from 0.2% to 0.12% and from 0.25% to 0.21%, respectively, both coming in well below ETF’s average fees of about 0.4%.
The cuts come a day after several other spot bitcoin ETF applicants cut their fees to below 50 basis points, though BlackRock, the world’s largest asset manager, will have the lowest fees.
The fee rollbacks also come hours before the Securities and Exchange Commission’s expected blanket approval of bitcoin ETFs coinciding with the deadline to decide on Ark’s application.
A notable holdout from the price war is Grayscale, operator of the largest already available bitcoin fund, as the digital asset manager says it expects to charge a 1.5% fee upon the proposed conversion of its bitcoin trust into an ETF.
Key Background
Spot bitcoin ETFs will allow investors the easiest, and perhaps safest, pathway to ownership yet of the largest crypto token. Such funds will allow investors to put money into bitcoin without directly owning the digital asset, working similarly to ETFs tracking indexes like the S&P 500 which allows investors exposure to the index’s components without directly owning all the stocks tracked by the fund. Bitcoin prices have surged as the SEC’s approval of bitcoin ETFs looked increasingly likely; bitcoin is up nearly 70% since mid-October, when a federal court ruling hinted regulators’ prior rejection of bitcoin ETF proposals had been unlawful. The institutional vote of confidence in bitcoin follows a challenging two-year stretch for the crypto industry, highlighted by the stateside collapse of previously the two largest crypto exchanges, Binance and FTX.
Big Number
$70 billion to $80 billion. That’s how much capital Bernstein analysts project bitcoin ETFs to hold by the end of next year.
Tangent
The SEC seemingly announced on its X account Tuesday that it had approved bitcoin ETFs, causing bitcoin prices to surge. However, the agency, long a public skeptic of crypto, said the post was fake and was a result of “unauthorized access.”
