VanEck Waives Sponsorship Fees on First $1.5B in Bitcoin Trust ETF Amid Industry's Price War
Summary:
VanEck has announced zero sponsorship fees for the first $1.5 billion in its Bitcoin Trust ETF until March 31, 2025. This move comes as ETF managers engage in a price war over their funds’ management expenses. The industry average fee has now decreased below 0.30%. Despite this, the United States spot Bitcoin ETFs collectively manage around $55 billion in assets with a total trading volume of $110 billion. Bitcoin ETFs have overtaken S&P 500 Industrial ETFs in size but still remain a long way behind gold ETFs.
Investment management firm VanEck declared all sponsorship fees will be completely eliminated for the first $1.5 billion invested in its Bitcoin Trust ETF, valid up until March 31, 2025. Announced on March 11, any amount above $1.5 billion would incur a sponsor fee, set at 0.20% of net assets handled. The company expressed its conviction in Bitcoin stating that starting the next day, investors can park their funds in the VanEck Bitcoin Trust (HODL) without incurring any fees till the specified date. The trust, endorsed by the US Securities and Exchange Commission (SEC) on January 4, currently manages $297.86 million in assets, comprising 4,299 pieces of Bitcoin (BTC). The ETf which tracks Bitcoin's trajectory has rewarded its holdings with an 87.7% return since it was founded two months prior.
As the SEC contemplated the approval of spot Bitcoin ETF submissions, the managers of ETFs initiated a pricing competition over their fund management fees. Before added competition entered the market, the Grayscale Bitcoin Trust charged an annual management fee of 2%. However, the industry average has now dipped below 0.30%.
In conjunction, Eric Balchunas, a seasoned ETF analyst from Bloomberg, observed in his analysis that the ten listed spot Bitcoin ETFs in the U.S. collectively managed an unprecedented $55 billion worth of assets and a total trading volume of $110 billion. He commented on the impressive statistics stating that if these figures remained consistent until the year-end, he would declare it a victory. Achieving these numbers in an eight-week time frame was extraordinary. However, he cautioned against inflated growth predictions.
Currently, Bitcoin ETFs have outperformed S&P 500 Industrial ETFs in terms of size but trail the asset management of S&P 500 Low Volatility sector ETFs. They are also significantly far from the trillions of dollars handled in gold ETFs. As of the news release, Bitcoin was trading at an all-time high rate of $72,721.
Published At
3/11/2024 10:42:51 PM
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