The Bitcoin ETF market is about to explode. The SEC is expected to approve the marketing of these crypto funds in the coming days. Potential investors are eager to get started. But they will have to watch out for fees. Indeed, these costs constitute one of the essential factors in the future of these new assets.
Crypto market: Bitcoin ETF fees are important for two reasons
First, all Bitcoin ETFs will hold the same asset : bitcoin. This means that investors should not be willing to pay higher fees for an ETF that offers the same potential returns.
Second, Bitcoin ETF fees are an indicator of competitiveness of the issuer in the crypto universe. Issuers that offer lower fees are more likely to gain market share in this market competitive.
Fidelity offers the cheapest Bitcoin ETF fees in the crypto world
Fidelity is the cheapest of the potential Bitcoin ETF issuers. Its ETF, the Fidelity Bitcoin ETF, will charge a fee of 0.39%. This is much lower than the fees offered by other issuers, which range from 0.59% to 0.95%.
Fidelity has a potential advantage over other issuers because of its vertical integration. It uses its own custodian, allowing it to reduce costs in the crypto space.
BlackRock, the big absentee in the fee proposal
Invesco, Galaxy, Ark, 21Shares, Valkyrie followed in Fidelity’s footsteps by setting their Bitcoin ETF fees. Which is not the case for BlackRock. This absence necessarily attracts the attention of the crypto community. All eyes are on BlackRock: will it challenge Fidelity by offering cheaper fees?
One thing is certain: potential investors will need to pay attention to fees when choosing a Bitcoin ETF.
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