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.
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.
