BlackRock ignites fee war in Bitcoin ETF race: ‘Much cheaper than I predicted’

The spot Bitcoin exchange-traded fund fee war is heating up, with some issuers offering promotional fees to entice new investors.

Crowded ETF race

The race for a spot Bitcoin ETF has become crowded, and issuers are working hard to differentiate themselves from the competition.

With potential approval looming, issuers are re-filing registration documents and making final touches. On Monday, BlackRock revealed its fee structure for the first time, while Cathie Wood’s Ark Invest slashed its previous fee.

BlackRock said in a revised S-1 filing on Monday that it plans to charge potential investors just 0.2%, or 20 basis points, for the first 12 months, or on the first $5 billion invested.

The move comes as big finance players encroach on native crypto players in offering Bitcoin investment products to consumers. To win market share, they’re enticing retail investors with competitive offers.

“This is much cheaper than I predicted,” Bloomberg Intelligence ETF analyst Eric Balchunas tweeted, referring to BlacRock’s pricing. “Life just got a LOT tougher for everyone else.”

Ark Invest dropped its fee to zero for the first year, or $1 billion invested. Cathie Wood’s fund will charge 0.25% thereafter, the same fee as VanEck.

Bitwise chose to offer zero fees for the first six months and the first $1 billion in assets, rising to 0.24% thereafter. Franklin Templeton will charge its clients 0.29%.

Fidelity announced it will charge 0.39% for its spot Bitcoin ETF in December.

Crypto native Grayscale, with a head start of some $26 billion in assets under management, has lowered its fee too. The digital asset manager dropped its fee from 2% to 1.5%.

“Grayscale’s ability to compete in the spot bitcoin ETF category will ultimately come down to how committed they are to lowering fees,” Nate Gercai, president of financial advisor the ETFStore, told DL News last week.

While the digital asset manager broke new ground and pioneered Bitcoin investment trust in the US, it faces huge competitions from established rivals.

Crypto market movers

• Bitcoin added 2% to hover around $45,000 again after briefly trading above this level last week.
• Ethereum was up 1.1% to about $2,250.

What we’re reading

• UK officials hope to spur blockchain development with regulatory sandbox — DL News
• New crypto projects are rewarding Celestia stakers with airdrops. Here’s why — DL News
• Financial Action Task Force to shape toughening crypto regulations, says TRM Labs — DL News
• Logan Paul Commits $2.3M To Buy Back CryptoZoo NFTs; Top Investor Threatens Lawsuit — Milk Road
• Bitcoin ETF Approval Odds Surge To 95%: Bloomberg Analyst — Milk Road
• From Silicon Valley to sand dunes: why Indian cryptocurrency firms are eying Dubai for growth — SCMP
• Arbitrum Takes Lead in Daily DEX Volume for First Time, Surpassing Ethereum and Solana — Unchained

Adam Morgan McCarthy is a markets correspondent for DL News. Have a tip? Contact the author at adam@dlnews.com.