The Bitcoin spot ETFs in multiple applications have announced the fund’s fee structure in the updated documents submitted today. According to the table compiled by Bloomberg analyst James Seyffart, ARK 21Share and Bitwise plan to seize the market with a promotional strategy of 0 management fees. They will charge a fee of 0.24% after the fund trades for 6 months or when the fund size exceeds $1 billion. Invesco has also adopted a similar strategy, but with different termination conditions (6 months or when the fund size exceeds $5 billion) and a higher fee of 0.59% after the promotion ends.
The most anticipated BlackRock iShares Bitcoin ETF will charge a management fee of 0.2% initially and then 0.3% after the fund trades for 1 year or when the fund size exceeds $5 billion.
In addition, the highest fee in the table belongs to Grayscale. According to its latest submitted Bitcoin spot ETF S-3 update document, the fee rate has decreased from 2% to 1.5%, but it still includes a clause about exempting fees. Therefore, the fee rate for Grayscale’s Bitcoin spot ETF is not finalized yet and may be further reduced.
However, another analyst, Eric Balchunas, believes that Grayscale maintains such a high management fee because the fund’s existing size is large enough and does not need to lower prices to compete in the market. Even if customers move to other ETFs, Grayscale can still profit from the process of customer exits and lower fees in the future.
Another interesting thing about the fee mechanism of Bitcoin ETFs is that asset management company VanEck previously publicly pledged to invest in the Bitcoin ecosystem for the long term and stated that once its Bitcoin ETF is approved, it will allocate 5% of potential profits to Bitcoin ecosystem developer Brink for at least ten years. So far, other issuers have not made similar commitments.
