Bitwise has the lowest fees for Bitcoin spot ETFs — Grayscale competes on scale | CoinDesk JAPAN

With the U.S. Securities and Exchange Commission (SEC) expected to approve a Bitcoin spot exchange-traded fund (ETF) two days later on January 11, all potential issuers are expected to make significant (or maybe not the most important) decisions. ) disclosed that. It’s a fee. There are large differences in the fees charged by each company.

With more than 10 ETF applications awaiting SEC approval or rejection, fees will be one factor that sets them apart. Lower fees mean more profit for investors.

Crypto investment firm Bitwise has set its lowest fees at 0.24% after waiving fees for the first six months. Meanwhile, several competitors are not far behind, with Ark 21Shares planning for 0.25%, VanEck 0.25% and Franklin Templeton 0.29%.

BlackRock, the world’s largest asset manager, is at 0.30%. But given its size and name recognition, some experts expected it to be able to compete with higher fees.

Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, wrote in a post on X that BlackRock’s fees have “put other companies in a pretty tough spot.”

Others include Fidelity at 0.39%, Galaxy/Invesco at 0.59%, Valkyrie at 0.80%, and Hashdex at 0.90%. Like Bitwise, most issuers plan to reduce fees over a period of time.

The focus is on gray scale. The company is converting the Grayscale Bitcoin Trust (GBTC) into an ETF, but the fees are expected to be high at 1.5%. Although it is lower than the trust’s 2% management fee and could potentially be waived, some observers say it may not be enough to compete with other companies.

“It’s hard to imagine an investment advisor recommending an ETF with a 1.5% fee,” Balciunas told X. Grayscale’s fees “simply don’t work,” fellow ETF expert Nate Geraci wrote in a post on X. According to Morningstar research, the average fee for ETFs in 2022 was 0.37%.

But Grayscale has an advantage in another very important factor in the ETF market: scale. The company already manages more than $27 billion in Bitcoin, giving it a huge advantage over other companies with zero assets under management.

｜Translation: CoinDesk JAPAN Editorial Department
｜Editing: Koki Mizuno, Takayuki Masuda
｜Image: Joseph Sohm/Shutterstock
｜Original text: Bitwise Tops Bitcoin ETF Low-Fee Table, While Grayscale Bets on Size