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January 08, 2024 at 10:17 AM
As spot Bitcoin ETF hopefuls rush to file their final documents with U.S. regulators, a key difference is emerging among the applicants in their proposed fee structures.
At the top end: The Grayscale Bitcoin Trust, which would carry a 1.5% fee if the U.S. Securities and Exchange Commission approves its conversion into an exchange-traded fund.
While that would be lower than GBTC’s current 2% fee, it comes well above its competitors.
The race-to-the-bottom on fees is a feature of the highly competitive $8 trillion U.S. ETF industry, where even a couple of basis points of difference can translate into millions of dollars worth of inflows.
While GBTC has an enormous advantage in existing assets — it boasts $27 billion in assets as a trust since its 2013 inception — its competitors will charge a fraction of its proposed expense ratio.
Bitwise and Ark / 21Shares are offering an initial sweetener of zero fees for the first six months or the first $1 billion in assets, whichever comes first.
After that, their fees rise to 0.24% and 0.25% respectively.
VanEck’s HODL product would charge 25 basis points.
