Bitcoin ETFs on Horizon: Fidelity, Galaxy/Invesco Set Fees Amid Anticipation
Summary:
Fidelity Investments and Galaxy/Invesco have set the annual fees for their proposed Bitcoin ETFs at 0.39% and 0.59% respectively, according to a Fortune report. Jane Street Capital has been chosen as the 'authorized participant' for the Bitcoin ETFs of Fidelity, WisdomTree, and Valkyrie. These ETFs will use a 'cash' model where participants deposit cash equivalent instead of buying Bitcoin. This comes amid anticipation for the approval of a spot ETF in the U.S., which is believed could introduce new investors to Bitcoin.
According to a Fortune report, the fees that would be levied once their Bitcoin exchange-traded funds (ETFs) are greenlit have been determined by Fidelity Investments and Galaxy/Invesco. The former expects to charge an annual fee of 0.39% for its Wise Origin Bitcoin Trust, while the latter will impose a 0.59% per annum fee for its BTCO fund - with the caveat of a six-month fee waiver upon the fund's execution. This information was unveiled via a legal document filed on December 29.
Jane Street Capital has been identified as the 'authorized participant' for Bitcoin ETFs under the purview of Fidelity, WisdomTree, and Valkyrie according to the same report. This denotes their prerogative to rectify disparities between the share prices of these funds and Bitcoin's market price. Valkyrie elected Cantor Fitzgerald as another authorized participant, as did Galaxy/Invesco and BlackRock with both JPMorgan and Virtu.
Instead of acquiring Bitcoin to deposit into the funds, these ETFs will employ a 'cash' model for creation and redemption. Authorized participants are expected to deposit an equivalent cash value for the Bitcoin amount they intend to deposit. The fund would then use this liquidity to acquire Bitcoin. The United States Securities and Exchange Commission (SEC) has indicated its preference for this method, suggesting that it does not want to permit broker-dealers to deal directly with Bitcoin.
There has been anticipation for the approval of a spot ETF in the United States among Bitcoin holders, which they believe will attract a new demographic of investors to Bitcoin and consequently increase its price. The SEC has historically dismissed multiple Bitcoin ETF proposals, though in August the tide appeared to change when Grayscale emerged victorious from a lawsuit against the authority. Following this, a U.S. Court of Appeals insisted that the SEC review its unjust rejection of Grayscale's application for a spot Bitcoin ETF.
Subsequent to this decision, the SEC has received a slew of new applications and proposed revisions for Bitcoin ETFs, including those by Fidelity, WisdomTree, Invesco Galaxy, and Bitwise. However, as it stands, there has yet to be any formal announcement about the approval of any Bitcoin spot ETF by the SEC.
Published At
1/2/2024 10:20:14 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.