With the Securities and Exchange Commission (SEC) expected to decide on the approval of one or more U.S. spot Bitcoin exchange-traded funds (ETFs) in the coming days.
With the Securities and Exchange Commission (SEC) expected to decide on the approval of one or more U.S. spot Bitcoin exchange-traded funds (ETFs) in the coming days, all potential issuers have disclosed their fees, a key factor that could influence investor decisions.
Among the 13 proposed ETFs awaiting SEC approval, fees range from a low of 0.24% to a high of 1.5%. The fee, charged as a percentage of the fund's assets, directly impacts investors' returns. Crypto native fund manager Bitwise is offering the lowest fee at 0.24%, with a 6-month introductory period of no fees. Ark and 21Shares, VanEck, and Franklin Templeton are also charging competitive fees of 0.25%,0.25%, and0.29%, respectively.
BlackRock, the world's largest asset manager, has set its fee at 0.30%, lower than some experts had anticipated. This move could shake up the competition, as BlackRock's size and reputation could have allowed it to charge more and still attract investors. Fidelity's fee is set at 0.39%, while Invesco and Galaxy have opted for a higher fee of 0.59%. Valkyrie and Hashdex have chosen fees of 0.80% and 0.90%, respectively.
Grayscale, which is seeking to convert its Grayscale Bitcoin Trust (GBTC) into an ETF, stands out with the highest fee of 1.5%. While this is lower than GBTC's current management fee of 2%, it may not be enough to compete with other applicants, according to some observers. Despite its high fee, Grayscale has a significant advantage in terms of size. It already has over $27 billion of assets under management, giving it a head start compared to other applicants with zero assets.
The average expense ratio for ETFs in 2022 was 0.37%, according to Morningstar. For reference, the VOO Vanguard S&P 500 ETF, one of the leading stock market index funds, charges a fee of 0.03%.
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