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Schwab Eyes Cryptocurrency ETF Entry, Poised to Disrupt the Market

Last Updated January 29, 2024 12:59 PM
Teuta Franjkovic
Last Updated January 29, 2024 12:59 PM

Key Takeaways

  • Charles Schwab is reportedly considering entering the spot Bitcoin ETF market.
  • Schwab’s entry could be imminent, as experts believe the company is carefully planning its strategy.
  • The company is known for introducing low-cost products, and a spot Bitcoin ETF could shake up the market.

After U.S. spot Bitcoin ETFs saw $25.36 billion in trades over 11 days, speculation grows about Charles Schwab’s possible entry.

Schwab may not be the first to enter a market but experts believe their impact would be substantial.

Schwab’s Potential Foray into Bitcoin ETF Arena

Speculation about Charles Schwab’s possible entry into the spot Bitcoin ETF market following the launch of ten U.S.-based ETFs on January 11, 2024, is mounting . In her opinion piece, Lisa Shidler commented  on the firm’s discreet approach to cryptocurrency, hinting at a strategic entry. Shidler explores  how Schwab, with its vast reach and competitive pricing, could significantly impact the Bitcoin ETF space.

In her discussion with Eric Balchunas, Bloomberg’s senior ETF analyst, Shidler delves deeper into the matter. Balchunas suggests  that Schwab might make an unexpected move by introducing an offering with a low fee, possibly 10 basis points.

He doesn’t rule out the possibility, noting :

“They could have something up their sleeve. They might like to do something like that.”

Adding to this perspective, Morningstar analyst Bryan Armour confirms to Shidler that such a strategic approach aligns with Schwab’s typical operational style.

Schwab Eyeing Spot Bitcoin ETF Entry, Seeking to Disrupt Fidelity’s Lead

Founded in 1971, Charles Schwab provides a comprehensive suite of services encompassing brokerage, banking, and financial advisory, with a particular focus on exchange-traded products (ETPs). The firm’s extensive ETP offerings include a diverse range, from complex ETPs to leveraged and inverse variants.

On the platform X, Eric Balchunas noted the possibility that Schwab might be feeling the competitive pressure due to Fidelity’s notable head start in the spot Bitcoin ETF market.

Balchunas said: 

“Don’t sleep on Schwab. They’re never first to market in anything but they make back impact when they come in [with] dirt cheap fee [plus] 30 [million] active brokerage accts. And they do NOT like Fidelity, so FBTC’s success could annoy them to file something sooner rather than later.”

Calculated Entry into Bitcoin ETF Market: A Strategic Long-Term Play

According to Bryan Armour, an analyst at Morningstar, Schwab’s systematic approach to product development is a hallmark of its strategy.

Armour highlighted :

“It’s consistent with what we’ve seen from Schwab, overall. They’re more methodical with their approach to product development than others. They trade the first-mover advantage for having a more thoughtful lineup that can stick with them for the long-term.”

On the social media platform X, Nate Geraci, co-founder of ETF Institute, echoed  this sentiment and aligned with Balchunas’ views, signaling Schwab’s imminent entry into the spot Bitcoin ETF market.

Geraci expressed :

“Schwab to enter spot bitcoin ETF race? I say it’s already [a] foregone conclusion. Agree [with] Eric [and] believe will happen (sooner rather than later).”

It seems analysts are convinced that Charles Schwab is likely to enter the spot Bitcoin ETF market soon, as the company has a strong reputation for introducing low-cost products and a large customer base. Schwab’s entry could shake up the market and put pressure on other providers to lower their fees.

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