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In recent days, statements made by Invesco and Galaxy Asset Management, in particular, have emerged as a reflection of the fee war in cryptocurrency ETFs.
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Significant Fee Reductions:
Invesco and Galaxy Asset Management have reduced the fees of their Bitcoin ETFs from 0.39% to 0.25%, increasing competition in this area and taking a significant step towards attracting investors.
Other Prominent Names in the Market:
However, with this fee reduction, Invesco Galaxy Bitcoin ETF (BTCO) has reached the same level as other issuers such as Ark, 21Shares, Bitwise, and Franklin Templeton. It has been observed that traditional financial issuers such as BlackRock and Fidelity have received more attention in the early days in this area.
Asset Growth and Fee Waiver: (Invesco)
According to Invesco’s statement, a zero fee will be applied for BTCO until its assets reach 5 billion dollars or for the first six months. This strategy aims to attract investors and increase the size of the fund.
GBTC Outflows and Price Pressure:
Although Bitcoin Trust (GBTC) outflows have created downward pressure on Bitcoin’s price for a while, JPMorgan analysts have stated that this situation has largely subsided.
We have @InvescoUS & @galaxyhq cutting the long term fee on their #Bitcoin ETF from 39 bps to 25 bps.
(Yes they have the fee waiver to 0% for first 6 months or $5 billion in assets). Story from @emily_graffeo & @kgreifeld pic.twitter.com/Erk2NU9kVF
— James Seyffart (@JSeyff) January 29, 2024
Increased Volume of New ETFs:
According to data, nine new spot Bitcoin ETFs in the US have seen a huge demand, almost doubling the volume of GBTC. BlackRock and Fidelity’s ETFs have made up a large portion of the volume in this area.
International Effects:
It has been observed that the fee war in the US has also affected European ETFs, and speculation has emerged that traders are starting to turn to US-based products.
Fee Reductions in Europe:
The reduction of fees in Invesco’s European-based Bitcoin ETF last week, and the follow-up of this move by WisdomTree, showed that a similar fee war is also taking place in Europe.
Conclusion and Future Expectations:
These rapid changes in the area of cryptocurrency ETFs are affecting investors’ preferences and leading to increasing competition in this area. As investors tend to prefer funds that offer low fees and favorable conditions, new products and strategies are expected to emerge in the coming days.