Invesco and Galaxy slash fee amidst fierce Bitcoin ETF fee war

Invesco Galaxy Bitcoin ETF has dropped its fees and now matches those of Blackrock, Valkyrie, Fidelity and VanEck.
BTCO cutting its fees comes amidst fierce competition from newly minted spot Bitcoin ETFs.

Invesco and Galaxy have slashed the fee for their Bitcoin exchange-traded fund, as rival issuers jockey for a greater share of the ETF market.

BTCO, the sixth largest US spot Bitcoin ETF by net assets, reduced its fees by 14 basis points from 0.39% to 0.25%, per an announcement on Monday.

The new fees brings it closer to pricing of rival funds operated by BlackRock, Valkyrie, VanEck, and Fidelity.

Invesco and Galaxy said they will continue to forgo fees for the first six months or until the fund accumulates $5 billion in assets.

Invesco and Galaxy’s fee adjustment comes at a time when competitive pricing has become a critical differentiator for US Bitcoin ETF issuers, with many offering to waive fees over the short term.

The move marks another development in the intensifying fee war that was kicked off by BlackRock days before the US Securities and Exchange Commission greenlit 11 spot Bitcoin ETFs.

The world’s largest asset manager unveiled its fee structure on January 8, saying it planned to charge potential investors just 0.2%, or 20 basis points, for the first 12 months, or on the first $5 billion invested, surprising market watchers.

“This is much cheaper than I predicted,” Bloomberg Intelligence ETF analyst Eric Balchunas tweeted at the time. “Life just got a LOT tougher for everyone else.”

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The lowest fee across all funds is Franklin Templeton’s EZBC at 0.19% with a waiver in place until August 2, or until $10 billion in assets is reached.

That’s followed closely by Bitwise’s Bitcoin ETF at 0.2% with fees waived in the first six months or until $1 billion in assets, according to the latest figures from Bloomberg analyst James Seyffart.

On the other end of the spectrum, Grayscale’s ETF, GBTC, has the highest fees among competitors at 1.5%.

GBTC has bled money since converting the fund into an ETF, but the outflows seem to be slowing down.

Grayscale’s flagship fund has witnessed outflows to the tune of roughly $5 billion in total, according to crypto analytics firm Kaiko.

Sebastian Sinclair is a markets correspondent for DL News. Have a tip? Contact Seb at sebastian@dlnews.com.