These firms have cut fees for spot Bitcoin ETFs amid industry competition

Several firms have recently reduced their filings, according to their latest S-1 forms filed with the US Securities and Exchange Commission.

This is compounded by speculation surrounding the US Securities and Exchange Commission's (SEC) decision on Bitcoin ETFs in response to ongoing industry competition.

Spot Bitcoin ETF Payment Wars Escalate

As the SEC's deadline approaches, various filers including Valkyrie, Wisdomtree, BlackRock, VanEyck, Invesco, Galaxy, GrayScale and ARK Invest have raised their fees in order to gain a competitive edge.

On a more serious level… here are all the organizations working hard behind the scenes. @Fidelity has lowered their fees by up to 25bps and is offering up to 0% off fees until July 31, 2024. pic.twitter.com/Ao0WmICBFh

— James Seyff (@JSeyff) January 9, 2024

Fidelity has lowered its fee from 0.39% to 0.25% bps and is offering a 0% fee waiver until July 31, 2024. Bitwise is charging 0% for the first six months and the first $1 billion in assets. 0.20% fee.

ARK Invest and 21Shares have reduced their fees from 0.25% to 0.21%. The company will adhere to its zero-fee policy for six months or until its total assets reach $1 billion.

BlackRock has adjusted its sponsor fee for the Bitcoin ETF to 0.25%, down from the previous 0.3%. The investment giant also lowered its interim discount to 0.12 percent for the first $5 billion of assets in the first 12 months, as disclosed in an S-1 filing today.

WisdomTree cut its fee from 0.5% to 0.30%, while Galaxy Invesco cut its fee from 0.59% to 0.39%.

Valkyrie introduced a three-month fee waiver, reducing the fee from 0.80% to 0.49%. Meanwhile, Hashdex kept its sponsorship fee at 0.90%, and Grayscale lowered it from 2% to 1.5% on January 8, making it the most expensive in the group.

As the payment war intensifies, James Seifert warns that these payments still need to be finalized, leaving room for further adjustments.

Industrial sense

Among the ongoing adjustments, Bloomberg's senior ETF analyst Eric Balchunas described the current situation as akin to squeezing two-year payment wars into a few days.

An obvious point, however, is that ETF issuers are lowering their fees to absolutely bargain basement levels, reflecting their high expectations around AUM.

The biggest financial institutions in the world are telling you something…are they listening?

— Nick 🌠 Carter (@nic__carter) January 8, 2024

The pay wars have sparked various theories about the motivation behind the pay cuts. Nick Carter sees the trend of bargain-basement payments as a sign of “big expectations” about the flow rate expected from issuers.

Peter Atwater offers the opposite view. It suggests that issuers engaged in brutal fee wars are conducting a massive asset grab even as they sacrifice profitability.

Re: Bitcoin ETFs: Typically, firms wait to see how much they can sell before lowering the price.

— Peter Atwater (@Peter_Atwater) January 9, 2024

As Atwater posted on X, companies wait to assess their sales potential before pursuing price cuts.