Sunday, June 23, 2024

Price War Begins Between Wall Street Leaders For Bitcoin.. Which Is The Best Deal? By


© Reuters

A fee war has begun between asset managers as they eagerly await the announcement of the Securities and Exchange Commission's approval to issue exchange-traded funds for spot contracts (BTC ETF). Final position regarding orders for delivery of Bitcoin spot funds.

However, Securities and Exchange Commission Chairman Gary Gensler posted a tweet on the social networking site.

The beginning of the cartoon war

BlackRock, the world's largest fund manager, said in a regulatory filing on Monday that it would charge clients 0.2% of its fund's net asset value a year or until its ETF reaches $5 billion in assets, rising to 0.3%. Cent.

On the other hand, rival Arc Investments, which previously noted it would charge 0.80 percent of its bitcoin holdings, has offered to waive the fee for the first six months or until its ETF assets reach $1 billion. Then the fee will be fixed at 0.25 percent.

Likewise, Invesco (NYSE: ) will discount the first $5 billion of the fund for six months or before settling at 0.59 percent.

The final touches to regulatory filings are the latest moves ahead of an expected decision this week from the Securities and Exchange Commission on whether stock exchange funds will be allowed to invest directly in bitcoin. If approved, the funds will be released in a few days.

Bitcoin Rise… Currency Rally

Bitcoin surged to a 20-month high of $44,000 last month, and rose more than 5 percent to $45,200 this week as investors' expectations mounted ahead of the Securities and Exchange Commission's green light for several lawsuits.

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Because the products are similar — they're all designed to hold bitcoin — fees and, to a lesser extent, company branding will be a key part of how applicants differentiate themselves in a crowded market.

“It's a classic price war,” said James Angel, a faculty member at Merck Psaros. “How to prove your ETF is better than any other fund?”

“The only way you can compete is on price,” James said.

SEC and Spot Bitcoin Mutual Funds

For a decade, the SEC has opposed applications for bitcoin ETFs, arguing that bitcoin prices are set on unregulated exchanges and therefore cannot provide enough protection for investors. But pressure has been mounting on the regulator since it lost a court ruling last summer that blocked asset manager Greyscale's ETF application.

Grayscale said Monday it would cut its fees from 2 percent to 1.5 percent. A list of remaining suitors, including Wisdom Tree, Valkyrie and Fidelity, all offer fee structures comfortably below 1 percent.

“Greyscale is in a tough situation because they got in first, and that's the only way to get in. Now they're facing competition,” Angel added.

All issuers hope to take advantage of the rush in the asset class, similar to the $1 billion that flowed into Broshares when it offered its first bitcoin futures ETF in late 2021. That fund hit the $1 billion mark in its first two years. Days of Trading now has a net worth of around $1.8 billion.

“With a Bitcoin ETF, we're opening the door to Wall Street,” said Judd Comer, CEO of Melanion Capital.

Nadia Barnett
Nadia Barnett
"Award-winning beer geek. Extreme coffeeaholic. Introvert. Avid travel specialist. Hipster-friendly communicator."

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