VanEck trims fee on spot bitcoin ETF

Feb 26th, 2024 | By | Category: Alternatives / Multi-Asset

VanEck has lowered the expense ratio of the $200 million VanEck Bitcoin Trust (HODL US) to 0.20%, a reduction from the previous rate of 0.25%, in a move aimed at staying competitive in the rapidly developing spot bitcoin ETF market.

VanEck trims fee on spot bitcoin ETF

Pricing has emerged as a key battleground among spot bitcoin ETF providers.

This adjustment positions the fund as one of the most cost-effective options among the array of ten inaugural spot bitcoin ETFs that debuted last month.

Before last month’s listing of spot bitcoin ETFs, these ten issuers, which include significant players such as Grayscale Investments, BlackRock, Fidelity Investments, Invesco, Ark/21Shares, WisdomTree, and Bitwise Asset Management, were already vying for market dominance, with pricing emerging as a key battleground.

With this fee adjustment, VanEck now aligns with the second-cheapest spot bitcoin ETF in the US – the $1.2 billion Bitwise Bitcoin ETF (BITB US) which also comes with an expense ratio of 0.20%. Bitwise had initially implemented a fee waiver for its first $1 billion in assets, a milestone it surpassed in early February.

Franklin Templeton, meanwhile, leads the pack with the lowest fee on the market, having set the expense ratio for its $100 million Franklin Bitcoin ETF (EZBC US) at 0.19%.

The iShares Bitcoin Trust (IBIT US) stands as the largest spot bitcoin ETF, with $6.5 billion in assets. It features a tiered expense structure, offering an initial rate of 0.12% for the first $5 billion in investments, before increasing to 0.25% for subsequent amounts.

The spotlight on bitcoin has intensified recently, with its value surpassing the $50,000 mark for the first time since November 2021. This rally, which represents a more than 211% increase since the beginning of 2023, has been driven by the anticipation surrounding the launch of spot bitcoin ETFs in the US as well as additional factors including a weakening US dollar, softening inflation, and a pause in Federal Reserve interest rate hikes.

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