Competition among prospective bitcoin exchange-traded fund issuers intensified as companies slashed fees further in a bid to make products more attractive to investors ahead of a regulator’s decision on their future.
BlackRock Inc. lowered the fee on its proposed iShares ETF by five basis points to 0.25%, according to an updated filing with the Securities and Exchange Commission Wednesday. It also lowered its introductory offer on the fund, so that investors will pay a 0.12% fee in the first 12 months or for the first $5 billion in assets, rather than 0.20%.
“BlackRock is really going for the jugular here, this is just a brutal cut,” said Eric Balchunas, senior ETF analyst for Bloomberg Intelligence, in an interview. “They were kind of the favorite anyway because of their brand name and distribution, so for them to cut this low, this soon, is a blow to the rest of the competition.”
Ark Investment Management’s ETF with 21Shares will now be listed with a fee of 0.21%, a separate filing showed, four basis points lower than the fee it had proposed on Tuesday.
The changes come after several bitcoin ETF hopefuls reduced their fees Tuesday, including Invesco, Valkyrie and WisdomTree. Bitwise remains the cheapest option that could be offered to investors, listed at 0.20% after an introductory period.
With nearly a dozen ETF applications now in the basket, inflows within the first day of trading could reach up to $4 billion, according to a Bloomberg Intelligence note on Wednesday by Balchunas and fellow analyst James Seyffart.
The SEC is set to make a decision on some bitcoin ETF applications later on Wednesday. Industry watchers expect the watchdog may give the green light to several issuers at once, avoiding the risk of awarding a first-mover advantage.
Crypto investors have been eagerly awaiting approval of such a fund, viewing it as the key to making mainstream investors more comfortable with digital assets. A false post on the SEC’s X account on Tuesday claimed that the agency had approved the issuance of several Bitcoin ETFs, spurring wild swings in the token’s price.
Bitcoin traded lower at around the $44,900 mark on Wednesday at 9:10 a.m. in New York, having risen as high as $47,914 on Tuesday following the SEC’s now-debunked post.
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Pro-bitcoin professionals, however, say the cryptocurrency has ushered in change.
“LPL has evolved significantly over the last decade and still wants to scale up,” says one industry executive.
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