February 25, 2024

The heat in the spot Bitcoin exchange-traded fund (ETF) race has intensified amid shocking moves by potential issuers. Some are now trying to out-smart their rivals using their fee rates in the ETF applications.

Grayscale Investments claimed the spotlight following the recent amendment of its S-3 spot Bitcoin ETF filing, featuring a fee rate nearly 5x higher than that of its major rivals like BlackRock.

Grayscale Demonstrates A Wide Defiance Using Its ETF Fee

News of Grayscale’s ambitious move came through a January 8 X post shared by prominent market reporter Walter Bloomberg.

According to the report, Grayscale, one of the potential spot Bitcoin ETF issuers, has amended its S-3 filing, setting a 1.5% fee rate for the product. This news sent a shock wave across the crypto community as the fee is exorbitantly higher than those of BlackRock, ARK Invest, and others vying for ETF approval.

Before now, several speculations have been trending on the possible outcome of spot Bitcoin ETF approval. Some experts predicted that the US Securities and Exchange Commission (SEC) will approve all ETF applications at once for the issuers.

This action would eliminate the first-mover leverage, providing a level ground for all the issuers to operate. 

Further, some analysts believe that spot Bitcoin issuers would have to use their fee rates as bait to attract clients. They predict that low fee rates could do the work seamlessly. Contrary to expert opinions, Grayscale’s 1.5 fee is five times higher than most of its major competitors.

Notably, BlackRock Inc. opted for a 0.3% charge for its BTC ETF product. Similarly, other issuers charged lower rates in their amended filing with the SEC.  Ark’s 21Shares moved the bar even lower, with a fee rate of 0.25%.

Fidelity set its fee rate at 0.39%, while Franklin is charging 0.29% as a fee for its ETF product.

Also, Bitwise chose 0.24% as its fee with a zero fee waiver for the first six months. Many people have criticized Grayscale for its high BTC ETF fee rate. They think the asset manager has lost its competitive edge against BlackRock despite its long-standing reputation in the crypto industry.

The Trend And Checklist For Spot Bitcoin ETF

Several market participants and experts are watching the trends, marking the checklist for potential BTC ETFs. According to Nate Geraci, the amendment of S-1 and S-3 filings are part of the final stage in the race.

Additionally, Geraci outlined other events in his checklist that involve the SEC as an entity. This includes the approval votes by the SEC’s two major divisions: the Division of Corporate Finance and the Division of Trading & Markets.

Geraci predicted that the market wars will become more intense once the SEC approves the ETF filings. He wondered what some of the issuers like BlackRock, ARK, Invesco, Grayscale, and Fidelity have in store.


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