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BlackRock Stirs Competition in Crypto Space with “Competitive” ETF Fee

Last Updated January 8, 2024 2:35 PM
Teuta Franjkovic
Last Updated January 8, 2024 2:35 PM

Key Takeaways

  • BlackRock intensifies competition in the crypto market by introducing a Bitcoin ETF with a notably low fee.
  • The fee charged by the firm for its Bitcoin Trust surpasses those of competitors such as Valkyrie and Fidelity.
  • The news has further fueled the excitement surrounding the forthcoming investment options.

In the rapidly evolving market for Bitcoin exchange-traded funds (ETFs), BlackRock has made a competitive move  by setting a low fee of 0.3% for its upcoming iShares Bitcoin Trust.

This fee undercuts those of its competitors, such as Valkyrie Investments and Fidelity, which have fees of 0.8% and 0.39%, respectively, for their proposed spot Bitcoin ETFs.

Competitive Pricing with Lower Fee for iShares Bitcoin Trust Launch

The competition to introduce a Bitcoin ETF is intensifying, involving more than a dozen contenders ranging from cryptocurrency veterans like Grayscale to established financial giants such as BlackRock. BlackRock’s recent announcement further heats up this race and heightens the anticipation for the soon-to-be-launched investment products.

BlackRock’s 0.3% fee for its iShares Bitcoin Trust marks a crucial moment in the sector, highlighting the pivotal role of pricing in appealing to investors. Such fees are likely to attract investors seeking Bitcoin exposure via ETFs, making pricing a key factor in their decision-making process.

Goldman Sachs Mulls Participation in Proposed Spot Bitcoin ETFs

Goldman Sachs, in a notable shift from the typical reluctance of major US banks to engage directly with cryptocurrencies, is reportedly contemplating becoming an authorized participant in the proposed spot Bitcoin ETFs by BlackRock and Grayscale. This would align Goldman Sachs with other financial heavyweights such as JPMorgan Chase , Jane Street, and Cantor Fitzgerald.

The potential green light for spot Bitcoin ETFs is critical for the expansion of the cryptocurrency market. Nonetheless, regulatory hurdles remain a key concern, particularly with the SEC Chair Gary Gensler’s firm focus on regulatory compliance.

US Spot Bitcoin ETF Market Heats Up with Intensifying Fee War

Earlier, Fidelity managed to set a new low in spot Bitcoin ETF fees , pricing its planned fund significantly lower than most competitors. The Wise Origin Bitcoin Fund from Fidelity will have a fee of 0.39%. This is less than half of the 0.8% fee proposed by Valkyrie, as per their recent registration updates. On the other hand, Invesco, in partnership with Galaxy Digital, has established an expense ratio of 0.59% for its trust, with an initial six-month waiver on this fee for the first $5 billion in assets.

Bitwise seems to have obtained the largest amount of seed capital for its fund, as its undisclosed authorized participant has expressed interest in potentially investing up to $200 million. However, it’s important to note that the filing specifies there is no binding agreement regarding this investment.

Multiple applicants for Bitcoin ETFs have announced fee reductions for their proposed offerings. ARK 21Shares is waiving its 0.25% fee for the first six months or for the first $1 billion in transactions. Meanwhile, BlackRock’s initial fee of 0.2 will rise to 0.3% after 12 months or its first $5 billion in transactions.

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