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THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle

Cryptocurrencies

Cryptocurrencies

Could-be spot bitcoin ETF issuers start fee fight before approval deadline

Physical representations of the bitcoin cryptocurrency are seen in this illustration taken October 24, 2023. REUTERS/Dado Ruvic/Illustration
Physical representations of the bitcoin cryptocurrency are seen in this illustration taken October 2... Physical representations of the bitcoin cryptocurrency are seen in this illustration taken October 24, 2023. REUTERS/Dado Ruvic/Illustration
Physical representations of the bitcoin cryptocurrency are seen in this illustration taken October 24, 2023. REUTERS/Dado Ruvic/Illustration
Physical representations of the bitcoin cryptocurrency are seen in this illustration taken October 2... Physical representations of the bitcoin cryptocurrency are seen in this illustration taken October 24, 2023. REUTERS/Dado Ruvic/Illustration

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On Monday, several investment managers revealed their fees for their planned spot bitcoin exchange-traded funds (ETF), a step toward U.S. securities regulator approval this week.

In SEC filings, BlackRock (BLK.N), VanEck, Ark Investments/21Shares, and Bitwise, among others, said they expect to significantly undercut the average market rate for U.S. ETFs as the battle for market share heats up ahead of a Wednesday SEC approval deadline.

Morningstar reported Bitwise at 0.24%, the lowest among U.S. ETFs, followed by VanEck at 0.25%. Ark and 21Shares reduced their fees from 0.80% to 0.25%, while BlackRock stated 0.30%.

Fees are usually finalized before an ETF launches. Market participants expect the SEC to approve spot bitcoin ETFs this week, a milestone for the sector after a decade of seeking to launch the product.

“This is unprecedented,” stated VettaFi Research Chief Todd Rosenbluth. “Having a real race right out of the gate in that context is going to be dramatic and exciting.”

Investor protection concerns led the SEC to reject all spot bitcoin ETFs. Last year, a federal appeals court concluded that the regulator was incorrect to deny Grayscale’s proposal to convert its 2%-fee Bitcoin Trust (GBTC) into a spot Bitcoin ETF, raising hopes that it would approve the product.

On Monday, the business announced it would charge 1.5% for the planned ETF, the most significant cost yet. Greyscale CEO Michael Sonnenshein said the business has frequently contacted the SEC regarding the product in recent months. “It’s been very encouraging to work together to bring these products to market,” he told Reuters.

Crypto businesses like Grayscale Investments compete with BlackRock and Fidelity to develop a Bitcoin ETF. Morningstar ETF analyst Bryan Armour said fees are crucial for buy-and-hold investors. “There’s no reason to pay more for the same exposure,” they stated.

However, Georgetown University Business School assistant professor of finance James Angel said liquidity will be more crucial than fees for short-term speculators.

Hopes that the SEC would authorize a bitcoin ETF have boosted crypto sector confidence after the FTX disaster and other crypto catastrophes last year. The world’s largest cryptocurrency might attract billions more investors with a bitcoin ETF. Bitcoin closed at $44,828, up 2.01%.

Financial regulatory experts, including Washington advocacy organization Better Markets, said the crypto industry is full of fraud and authorizing the product would be a “historic mistake.”


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