New zero fee standard for Bitcoin ETFs creates cheap custodial alternative to exchanges

cyptouser3 weeks agoCryptocurrencies News105

The competition among spot Bitcoin ETFs is seriously heating up with Grayscale outflows declining, but now, so are the fees being charged by the Newborn Nine.

Shortly before the final SEC approval of the swathe of spot Bitcoin ETFs, which entered the market earlier this month, several ETF issuers dropped their fees in last-minute filings. Notable cuts on Jan. 8 saw Grayscale lower its 2% fee to 1.5%, while Ark Invest slashed theirs to 0.25% from 0.8%.

However, the day the ETFs were approved, Jan. 10, BlackRock announced a 0.12% fee for 12 months and 0.25% after that, causing ripples across other issuers. By the time the ETFs went live, several had chosen to waive their fees entirely for specific promotional periods.

The promotional rates appear to have had a strong impact, with the Newborn Nine acquiring around $6.4 billion in assets under management in just 13 trading days. However, the promotional activities are seemingly not over yet. The chart below, shared by Bloomberg analyst James Seyffart, shows the respective fees across all current spot Bitcoin ETFs in the U.S.

Interestingly, BlackRock, VanEck, and Grayscale are the only ETFs currently charging a management fee. All others have waived their fees for at least the first six months of trading.

NameTickerFee (after Waiver)Waiver DetailsFranklin Bitcoin ETFEZBC0.0%(0.25%)Until Aug. 2 or $10 BillionBitwise Bitcoin ETP Trust (Re-filing)HODL0.00% (0.19%)6 Months or $1 BillionARK 21Shares Bitcoin ETF(Re-filing)ARKB0.0% (0.20%)6 Months or $1 BillionFidelity Wise Origin Bitcoin Trust(Re-filing)FBTC0.0% (0.21%)Until July 31Valkyrie Bitcoin Fund(Re-filing)BRRR0.0% (0.25%)3 MonthsInvesco Galaxy Bitcoin ETF(Re-filing)BTCO0.0% (0.25%)6 Months or $5 BillionWisdomtree Bitcoin Trust(Re-filing)BTCW0.0% (0.25%)6 Months or $1 BillioniShares Bitcoin TrustIBIT0.0% (0.30%)12 Months or $5 BillionVanEck Bitcoin Trust(Re-filing)HODL0.12% (0.25%)NoneGrayscale Bitcoin Trust(Re-file)ConversionGBTC1.5%None

Grayscale seemingly has little inclination to lower its fees due to the size of its AUM and ability to garner significant revenues even as Bitcoin leaves the fund. By charging more than 130bps more than any other competitor and an AUM still over $20 billion, its revenues dwarf even BlackRock and Fidelity. Further, a fee reduction becomes even more unlikely, with outflows seemingly slowing.

The lack of management fees makes Bitcoin purchases through ETFs extremely competitive versus native crypto exchanges. For comparison, the chart below shows the cost to purchase and withdraw the respective amounts of Bitcoin to self-custodial using the average transaction fee as of press time. For U.S. investors with zero commission ETF trading options, spot Bitcoin ETFs offering 0% fees are a cheaper option for custodial Bitcoin.

ExchangeTrading Fees$100$200$2000Withdrawal FeesKraken0.26%$18.26$18.52$23.20$18Coinbase0.60%$10.45$10.65$21.45Network feeCrypto.com0.075%$27.07$27.15$28.50$27Gemini$0.99 or 1.49% for >$200$10.44$12.43$39.30Network feeCash App3% or 1.75% for >$200 or 1.25% for >$1999$12.45$12.95$34.45Network feeBinance0.1%$9.55$9.75$9.75Network fee

It will be interesting to see if any ETF extends its promotional period or further reduces the long-term fees. However, given that crypto exchanges available in the U.S., such as Coinbase and Kraken, charge over 0.25% on each trade, most long-term rates for ETFs are extremely competitive already. 

Author

Liam 'Akiba' Wright

Senior Editor at CyptoRanking

Also known as "Akiba," Liam is a reporter, editor and podcast producer at CyptoRanking. He believes that decentralized technology has the potential to make widespread positive change.

@akibablade LinkedIn Email Liam Editor

News Desk

Editor at CyptoRanking

CyptoRanking is a comprehensive and contextualized source for crypto news, insights, and data. Focusing on Bitcoin, macro, DeFi and AI.

@cryptoslate LinkedIn Email Editor Latest Report

The invisible engine: How OTC trading powers Bitcoin ETFs

Exploring the intricacies of OTC trading, providing a comprehensive understanding of this often overlooked but vital component of the market.

Andjela Radmilac · 2 days ago
The content on this website comes from the Internet. Due to the inconvenience of proofreading the authenticity and accuracy of the copyright or content of some content, it may be temporarily impossible to confirm the authenticity and accuracy of the copyright or content. For copyright issues or other issues caused by this, please Call or email this site. It will be deleted or changed immediately after verification.

related articles

Hut 8 responds to report criticizing USBTC merger and other activities

Hut 8 responds to report criticizing USBTC merger and other activities

The Bitcoin and digital asset mining firm Hut 8 responded to a recent critical report in a statement...

BlackRock aims to democratize digital investments in India, amid growing BTC rumors

BlackRock, the world’s largest asset manager, has announced a joint venture with Jio Financial Servi...

Yuga Labs and Magic Eden to launch new royalty-focused Ethereum NFT marketplace by 2023 end

Cross-chain non-fungible token (NFT) platform Magic Eden has partnered with Bored Ape Yacht Club (BA...

Galaxy Digital eyeing assets held by distressed crypto firms: FT

After reporting exponential asset growth following its deal to liquidate FTX‘s holdings, Galax...

BitBoy removes host Ben Armstrong amid meme coin controversy – reports

Ben Armstrong, the influential figure behind BitBoy Crypto, has reportedly left the company, leaving...

Celsius announces new settlement, offering users greater flexibility and convenience

Celsius, the leading cryptocurrency lending and borrowing platform, has announced a new settlement t...