The Race to the Bottom: Bitcoin ETF Fees Dip Even Lower

In the competitive landscape of cryptocurrency investment products, businesses are aggressively lowering fees to attract customers, raising questions about how low they can go before it starts impacting their bottom line. A series of spot bitcoin Exchange Traded Funds (ETFs) were recently launched in the U.S. after getting the green light from the Securities and Exchange Commission (SEC). Despite this milestone, firms are already differentiating themselves by adjusting their fee structures.

Franklin Templeton Leads with Aggressive Fee Cuts

Among the newly trading bitcoin ETFs, Franklin Templeton has made a notable move by reducing its fees sharply after just one day in the market. Its Franklin Bitcoin ETF, which initially posted substantial first-day trading volumes, announced a fee drop from 29 basis points to 19 basis points, positioning itself as the most cost-effective option amongst competitors. Despite a limited-time fee waiver, this reduction sets a new benchmark, slightly undercutting Bitwise, which has a 0.2% fee. On the other end of the spectrum lies Grayscale’s Bitcoin Trust, with a fee of 1.5%, demonstrating the broad spectrum of costs for investors.

As the demand for cryptocurrency and bitcoin-related investment products is anticipated to continue growing, major investment firms are eager to establish a foothold. Sandy Kaul, who oversees digital asset advisory services at Franklin Templeton, indicated an uptick in client interest over the past year, signaling an evolving market landscape.

Reflective of this burgeoning interest, the first day of trading for these ETFs saw $2.3 billion in volume, which when combined with an existing $2.3 billion from Grayscale’s GBTC fund conversion to an ETF, totals an impressive $4.6 billion according to industry analysts.

Bitcoin, ETF, Fees