Asset Managers Want Bitcoin ETF Supremacy Even if They Don’t Exist Yet
Asset managers are already in a pricing war to see who can offer the most attractive spot bitcoin ETFs, whether the SEC approves or not.
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Wall Street is discounting their chickens before they’re hatched.
Even though the SEC has yet to decide whether to permit stock market funds that invest directly in bitcoin, asset managers are already in a pricing war to see who can offer the most attractive spot bitcoin ETFs, the Financial Times reported.
See Spot Run
The price of bitcoin, which can be highly volatile, is set on unregulated exchanges, and because of that, the SEC has argued that it can’t properly protect investors.
However, regulators lost a legal battle to block a Bitcoin spot ETF application from crypto asset manager Greyscale last year. And the SEC does allow ETFs tied to bitcoin futures contracts. With that in mind and the SEC expected to make a decision this week, asset managers are fighting to be the go-to firm for bitcoin investors:
- Grayscale said Monday it would charge a 1.5% management fee for its ETF. Despite being the one that actually pressured the SEC and helped create a legal precedent, it’s facing plenty of competition from firms offering smaller fees.
- BlackRock intends to charge customers just 0.2% of the net asset value of its fund for the first year — or until its ETF hits $5 billion in assets, before rising to 0.3%, the FT reported. Meanwhile, Ark Investment Management offered to waive fees for the first six months, or until its ETF’s assets reach $1 billion.
Gary’s Gripes: Though it does look like the SEC will approve bitcoin spot ETFs, Chair Gary Gensler took to X Monday to point out the risks associated with cryptocurrencies such as their volatility and their use in scams. It felt like he was saying “Alright, we’ll approve it… but I’m not happy about it.”