Spot Bitcoin ETF Issuers Fighting Fees Before SEC Approval
Spot Bitcoin ETF Issuers in Fee War Ahead of Possible SEC Approval. Even before the product is certified by the US Securities and Exchange Commission (SEC), a fee war has begun for Bitcoin exchange-traded funds (ETFs). The following are the fees for Bitcoin ETFs as of right now: Ark charges 0.25 per cent, Bitwise 0.24 per cent, BlackRock iShares continues to charge 0.30%, VanEck 0.25 per cent, WisdomTree 0.5%, and 21Shares 0.25 per cent.
“Bitwise has the lowest long-term fee at 0.24%, followed closely by VanEck at 0.25%,” notes James Seyffart, an ETF Research Analyst at Bloomberg Intelligence. Alternatively, we provide charge waivers on 3 for 6 months, all the way down to 0%. Also, a 0.20 per cent BlackRock waiver” Market analyst Aditya Das of Brave New Coin says in his newsletter that it looks like the US approval of a spot Bitcoin (BTC) ETF is close. Just wanted to mention that January 10th is the last day to apply for Ark 21 Shares, one of the biggest ETFs. However, experts have speculated that the SEC would approve numerous petitions on this date only to make things easier.
“The spot Bitcoin ETFs’ application paperwork was revised and listed on the exchanges. Where they applied for trade the other day. This, according to market watchers, suggests that the exchanges are bracing for the US Securities and Exchange Commission (SEC) to greenlight the ETF proposals soon,” Das says.
SEC Backed into Corner
A recent webinar by Bloomberg ETF analyst Seyffart suggested that the SEC would be compelled to approve a spot Bitcoin ETF due to the pressures it is under.
The SEC will need to reconsider its current rationale or find another one. Since these are the very grounds on which you have been rejecting these ETFs. “The courts have established that those reasons are no longer relevant, and now you’re presenting new ones,” Seyffart remarked.
The Depository Trust & Clearing Corporation (DTCC) has approved ETFs from two issuers—WisdomTree and VanEck—to date. Two days before the SEC’s deadline for announcing. Its decision on the Ark 21Shares Bitcoin ETF registration, the most recent Bitcoin ETF ticker listing took place.
Fierce Competition
According to Laurent Kssis, a crypto expert on trading and ETFs at CEC Capital, “the US market is witnessing a fierce competition among ETF issuers to offer the lowest fees for bitcoin ETFs.” This is because US investors are expected to draw “huge” inflows of capital looking to gain exposure to the leading cryptocurrency.
According to Kssis, “the break-even point for launching a bitcoin ETF is estimated to be at least $2 billion per product,” meaning that only the most efficient and trustworthy issuers will be able to endure in the long term.
Not Everyone Benefits From a Bitcoin ETF
Having said that, Kssis does caution that not everyone will gain from the introduction of a Bitcoin ETF. There may be little increase in revenue for the low-margin businesses of the custodians and service providers. Who assists the ETF issuers?
Some projections put the 2024 cash production revenue for the thirteen issuers. They have applied for a Bitcoin ETF at $200 million, with only $30 million coming from custody fees. According to Kssis, Coinbase is the top US crypto exchange and custodian. Has a leg up in the market and connections with numerous ETF issuers. However, the company is also vulnerable to legal action because of an ongoing case that might impact its business. According to Kssis, this is placed into context by considering. That an exchange-traded fund (ETF) for Bitcoin with a 0.25 per cent charge would generate only $2.5 million in yearly revenue for the issuer.
“More and more regulatory agencies will recognize the importance of Bitcoin. The crypto market if Bitcoin spot ETF is successfully approved” stated KuCoin CEO Johnny Lyu. This will be a watershed moment that ushers in more transparent regulations and enhanced safeguards for investors. Paving the way for more institutional, professional, and individual players to join the cryptocurrency market. Crypto acceptance could reach new heights, according to Lyu. We found that more than 60% of users across all markets think cryptocurrency will rule the financial industry in the future. We anticipate a high likelihood of approval for the Bitcoin spot ETF due to this trend,” Lyu says.
Bitcoin Price is Rising
At the same time, Bitcoin’s (BTC) price surged, passing the $47,000 mark on Monday and registering an 8% rise in the past 24 hours. Reasons for the uptick include hopeful feelings about the ETFs’ possible clearance. The top cryptocurrency has hit its all-time high at its present price. There are whispers that the approval of an ETF could set off an even more optimistic trend.
