BlackRock and Ark Investments Reduce Bitcoin ETF Fee to Intensify Market Competition
BlackRock and Ark Investments reduced fees for their planned spot Bitcoin ETFs, racing to secure their share of expected capital inflow.
Investment management companies BlackRock and Ark Investments reduced the fees associated with their planned spot Bitcoin exchange-traded funds (ETFs). BlackRock has adjusted its fee structure for the first 12 months or until the fund reaches $5 billion in assets, as per a new S-1 filing. The revised fee is now 0.25%, down from the previously set 0.30%.
Likewise, Ark Investments and 21Shares have reduced the fee to 0.21% from the previous 0.25% (with a reduced rate of 0.12% for the first $5 billion). Additionally, the company will waive the entire fee for the initial six months after the fund’s listing or until the assets reach $1 billion, whichever occurs first.
The potential ETF managers have initiated a competition over fees, preempting approval from the US Securities and Exchange Commission (SEC) for their investment vehicles. This underscores their eagerness to secure a share of the expected capital inflow.
Investment Firms Gear Up for Intense Competition
The SEC is anticipated to simultaneously approve multiple ETFs, leading to providers competing for market share, with the fee structure being a key battleground. Although, usually fees are one of the last details finalized before the launch of an ETF.
Recently, Valkyrie, Bitwise, Grayscale, Invesco, BlackRock, ARK 21Shares, VanEck and WisdomTree filed updated S-1 Forms with the SEC. In this, the asset managers outlined proposed fee structures for their respective entities.
BlackRock, VanEck, Ark Investments, 21Shares, Bitwise and others stated in filings that they anticipate offering rates significantly lower than the average market rate for ETFs. The proposed fees were notably lower than what analysts had expected and the range indicated by some issuers. As all the ETFs are expected to provide the same return, their fees will play a crucial role in attracting new assets.
BlackRock and Ark Investments’ recent strategic adjustments, in anticipation of approval for spot Bitcoin ETFs, highlight each company’s ambition to take a leading position in the competitive race for market share.
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