BlackRock Fee War in the Race for Bitcoin ETFs
In a strategic move, BlackRock and Ark Investment Management have revised down the fees for their proposed spot Bitcoin exchange-traded funds (ETFs), intensifying the competition among nearly a dozen contenders.
BlackRock’s iShares Bitcoin Trust will now charge a reduced fee of 0.25%, down from the initial 0.30%, while ARK 21Shares Bitcoin ETF has lowered its fee to 0.21% from 0.25%. This fee reduction trend signifies an unprecedented fee war, unfolding even before U.S. Securities and Exchange Commission (SEC) approval, highlighting the urgency to secure a share of the anticipated capital influx.
Analysts and academics emphasize that fees will be a decisive factor in attracting new assets, considering that all these ETFs aim to deliver essentially the same return.
BlackRock’s revised fee structure for the first 12 months after ETF listing is set at 0.12% for the initial $5 billion of assets, making it competitive alongside Bitwise Bitcoin ETF, planning a 0.20% fee and waiving it on the first $1 billion of assets for the first six months post-listing.
The fee adjustments come in response to an incident where the SEC’s social media account briefly posted a fake message claiming approval of the long-awaited ETF. Despite the disruption, most issuers remain optimistic, expecting SEC approval late Wednesday afternoon, with trading potentially commencing on Thursday morning.
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