[NEWS] Bitcoin spot ETF, competition intensifies over trading fees

As the SEC (U.S. Securities and Exchange Commission) gets closer to approving a Bitcoin spot ETF, the price war for trading fees is intensifying among companies issuing the ETF. This was revealed in the most recent documents submitted by each company to the SEC.

In a document submitted on the 8th, BlackRock, the world's largest asset management company, said it would charge clients a 0.2% fee for the first 12 months after the ETF's launch or until the ETF's assets reach $5 billion. After that, the fee will rise to 0.3%.

Rival Ark Investments had previously suggested charging a fee of 0.8% of Bitcoin (BTC) holdings, but now it appears it will waive fees for the first six months after launch or until the ETF's assets reach $1 billion. After that, the fee will be 0.25%.

Similarly, Invesco will waive fees for the first six months of its launch or until the ETF's assets reach $5 billion, after which the fees will rise to 0.59%.

Trading fees are the competitive point for differentiation

Currently, Bitcoin spot ETFs that have been applied for are similar in design. Therefore, each company will need to differentiate itself through branding, including fees.

In light of this situation, James Angell, a faculty member at the Center for Financial Markets and Policy at Georgetown University's McDonough School of Business, said, "We're seeing a classic price war. When you want to prove that your ETF is better than other ETFs, the only way you can compete is through trading fees."

The SEC has previously rejected applications for Bitcoin spot ETFs, arguing that investor protections are insufficient. However, pressure on the SEC has been increasing since it lost a court case in August last year over its decision to reject the ETF conversion application by crypto asset management company Grayscale.

Reference:Reuters
Image: Shutterstock

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