New zero fee standard for Bitcoin ETFs creates cheap custodial alternative to exchanges

The competition among spot Bitcoin ETFs is seriously heating up with Grayscale outflows declining, but now, so are the fees being charged by the Newborn Nine.

Shortly before the final SEC approval of the swathe of spot Bitcoin ETFs, which entered the market earlier this month, several ETF issuers dropped their fees in last-minute filings. Notable cuts on Jan. 8 saw Grayscale lower its 2% fee to 1.5%, while Ark Invest slashed theirs to 0.25% from 0.8%.

How To Get Free Crypto  

However, the day the ETFs were approved, Jan. 10, BlackRock announced a 0.12% fee for 12 months and 0.25% after that, causing ripples across other issuers. By the time the ETFs went live, several had chosen to waive their fees entirely for specific promotional periods.

The promotional rates appear to have had a strong impact, with the Newborn Nine acquiring around $6.4 billion in assets under management in just 13 trading days. However, the promotional activities are seemingly not over yet. The chart below, shared by Bloomberg analyst James Seyffart, shows the respective fees across all current spot Bitcoin ETFs in the U.S.

Interestingly, BlackRock, VanEck, and Grayscale are the only ETFs currently charging a management fee. All others have waived their fees for at least the first six months of trading.

Name Ticker Fee (after Waiver) Waiver Details
Franklin Bitcoin ETF EZBC 0.0%(0.25%) Until Aug. 2 or $10 Billion
Bitwise Bitcoin ETP Trust (Re-filing) HODL 0.00% (0.19%) 6 Months or $1 Billion
ARK 21Shares Bitcoin ETF(Re-filing) ARKB 0.0% (0.20%) 6 Months or $1 Billion
Fidelity Wise Origin Bitcoin Trust(Re-filing) FBTC 0.0% (0.21%) Until July 31
Valkyrie Bitcoin Fund(Re-filing) BRRR 0.0% (0.25%) 3 Months
Invesco Galaxy Bitcoin ETF(Re-filing) BTCO 0.0% (0.25%) 6 Months or $5 Billion
Wisdomtree Bitcoin Trust(Re-filing) BTCW 0.0% (0.25%) 6 Months or $1 Billion
iShares Bitcoin Trust IBIT 0.0% (0.30%) 12 Months or $5 Billion
VanEck Bitcoin Trust(Re-filing) HODL 0.12% (0.25%) None
Grayscale Bitcoin Trust(Re-file)Conversion GBTC 1.5% None

Grayscale seemingly has little inclination to lower its fees due to the size of its AUM and ability to garner significant revenues even as Bitcoin leaves the fund. By charging more than 130bps more than any other competitor and an AUM still over $20 billion, its revenues dwarf even BlackRock and Fidelity. Further, a fee reduction becomes even more unlikely, with outflows seemingly slowing.

Coinbase Banner  

The lack of management fees makes Bitcoin purchases through ETFs extremely competitive versus native crypto exchanges. For comparison, the chart below shows the cost to purchase and withdraw the respective amounts of Bitcoin to self-custodial using the average transaction fee as of press time. For U.S. investors with zero commission ETF trading options, spot Bitcoin ETFs offering 0% fees are a cheaper option for custodial Bitcoin.

Exchange Trading Fees $100 $200 $2000 Withdrawal Fees
Kraken 0.26% $18.26 $18.52 $23.20 $18
Coinbase 0.60% $10.45 $10.65 $21.45 Network fee 0.075% $27.07 $27.15 $28.50 $27
Gemini $0.99 or 1.49% for >$200 $10.44 $12.43 $39.30 Network fee
Cash App 3% or 1.75% for >$200 or 1.25% for >$1999 $12.45 $12.95 $34.45 Network fee
Binance 0.1% $9.55 $9.75 $9.75 Network fee

It will be interesting to see if any ETF extends its promotional period or further reduces the long-term fees. However, given that crypto exchanges available in the U.S., such as Coinbase and Kraken, charge over 0.25% on each trade, most long-term rates for ETFs are extremely competitive already. 

Go to Source
Author: Liam ‘Akiba’ Wright

Recommended Crypto Services, Products and Strategies:

The first thing any crypto investor needs is is a reliable and secure Crypto Wallet.  Whether you’re looking for an online wallet, hardware wallet, desktop or mobile wallet, Crypto Renegade provides you with all the Best Crypto Wallets in each category.

Best Crypto Wallets Banner

When you’re ready to buy more crypto, or exchange your coins for others, Crypto Renegade’s list of the Best Crypto Exchanges has you covered.  The Crypto Exchanges recommended here offer everything from simplicity and convenience to advanced trading platforms and profit sharing. 

Best Crypto Exchanges Banner

If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.

Crypto Strategy Banner

For those people that don’t have any money to invest right now, or just want to understand the technology a bit more, you’ll definitely want to check out Crypto Renegade’s Free Crypto Strategy and start collecting Free Coins today!

Free Crypto Banner

What do you think about cryptocurrency? Do you have any questions about it? Be sure to leave a comment below.

Crypto Renegade

Web developer with a keen interest in the disruptive potential of cryptocurrency and blockchain technology. Experienced investor in various markets, including equities, bonds, real estate, p2p lending, and cryptocurrency. Loves coming up with solid investment strategies based on objective data to mitigate emotional risk. Believes in dollar cost averaging for long term investing while keeping a small allocation in cash for larger market dips.

You May Also Like

More From Author

This site uses Akismet to reduce spam. Learn how your comment data is processed.