Bitcoin ETF planned fees revealed: BlackRock goes low, Grayscale stays high

More fund groups vying to launch spot bitcoin ETFs revealed planned fees that would undercut a low mark previously held by Fidelity, as a fee war brews ahead of a possible approval.

The current price point for Grayscale Investments’ proposed product remains much higher, however. 

Financial services giant Fidelity proposed a 0.39% fee (of the ETF’s net asset value) for its planned spot bitcoin ETF, according to a Dec. 29 — the cheapest at the time.  

Read more: Fees, liquidity, brand: The factors investors would weigh when picking a bitcoin ETF

But similar funds by BlackRock, Bitwise, VanEck and Franklin Templeton, as well as one by Ark and 21Shares, would have that beat, according to Monday filings. 

BlackRock, the largest asset manager in the world, is set to charge 0.20% (20 basis points) for the first $5 billion of the iShares Bitcoin Trust’s assets, and 30 basis points after that. 

Bitwise intends to charge 24 basis points, with a six-month fee waiver on the first $1 billion of trust assets. Ark Invest and 21Shares plans to offer a fee of 25 basis points, with a similar initial waiver in place.

VanEck and Franklin Templeton also have Fidelity’s planned price beat at 25 basis points and 29 basis points, respectively, Monday filing shows — though the firms do not currently plan to waive any fees. 

Meanwhile Grayscale Investments is looking to convert its Bitcoin Trust (GBTC) to an ETF. GBTC, which launched in 2013 and has roughly $27 billion in assets under management, currently charges a 2% fee annually. 

Read more: Grayscale is not afraid of bitcoin ETF rivals — but should it be?

Grayscale has proposed dropping that to 1.5%, a Monday disclosure indicates. 

Such a fee could be unattractive to investors given where competitors plan to be at, Bloomberg Intelligence analyst Eric Balchunas said in a Monday X post.

Aside from the planned fees unveiled Monday, WisdomTree said in a previous filing it intended to charge 0.50%. A fund proposed by Invesco and Galaxy Digital would charge 0.59% (with a six-month fee waiver), while Valkyrie indicated a fee for its planned fund at 80 basis points.  

“Keep in mind this isn’t finalized so I would not be surprised to see them drop even further,” fellow Bloomberg Intelligence analyst James Seyffart added about GBTC’s fee in a separate X post. 

The flurry of details comes after various stock exchanges that would list such funds submitted amended documents Friday as part of final steps before potential approval. 

The Securities and Exchange Commission has until Jan. 10 to rule on the bitcoin ETF proposed by Ark and 21Shares, and industry watchers have said they expect the regulator to offer a ruling on most or all other similar proposals at that time. 

Approval of funds that hold bitcoin directly would mark a major milestone, as fund firms have tried to launch such products for a decade. The SEC has blocked the various attempts, and could do so again. 

Still, a number of segment observers and executives have expressed optimism for approval this time around, given BlackRock’s entrance into the race, Grayscale’s court win against the SEC in August, and other factors.   

Before issuers would be allowed to launch such funds, the SEC would have to approve the documents submitted by the stock exchanges — known as 19b-4s — as well deem effective the fund issuers’ so called- S-1 or S-3 registration statements. 

Scott Johnsson, a general partner at Van Buren Capital, said he believes if approval indeed comes by Jan. 10, spot bitcoin ETFs could begin trading next week.  

The SEC approved ETFs that hold bitcoin futures ETFs in October 2021. The first and largest such fund, the ProShares Bitcoin Strategy ETF (BITO), charges a fee of 95 basis points. 

Brazil-based Hashdex, which filed last year to convert its bitcoin futures ETF to a fund that would also hold BTC directly, did not submit an amended filing as of Monday at 9 a.m. ET. 
The Hashdex Bitcoin Futures ETF (DEFI) currently carries an expense ratio of 90 basis points.