Invesco and WisdomTree have cut European Bitcoin product fees by more than 60% amid surging ETF competition.
Posted: January 23, 2024 12:32 PM Updated: January 23, 2024 12:32 PM
Correction and fact check date: January 23, 2024, 12:32 p.m.
briefly
In response to the surge in ETFs in the US, Invesco and WisdomTree have cut fees on European Bitcoin products by 60%.
Investment management firm Invesco and global exchange-traded fund (ETF) WisdomTree have slashed fees on European Bitcoin products by more than 60%. The move comes in response to an “unprecedented” surge in the availability of new exchange-traded funds (ETFs) for US investors.
The fee adjustments will impact the $325 million WisdomTree Physical Bitcoin ETP, which will reduce fees from 0.95% to 0.35%, and the $137 million Invesco Physical Bitcoin ETP, which will reduce fees from 0.99% to 0.39%. These fee cuts have been announced in succession and are expected to take effect before the end of the month.
Additionally, Invesco’s U.S. product temporarily waives fees for the first six months or until it accumulates $5 billion worth of assets, after which it charges a 0.39% fee. This fee structure is consistent with recently released European product pricing.
The introduction of spot Bitcoin ETFs in the US has attracted significant interest in Europe.
However, many investors may not realize that they have been accessing similar exposure through physically backed ETPs since 2019. The launch of a spot Bitcoin ETF in the United States contributes to the asset class’ evolution in the cryptocurrency market. According to Alexis Marinof, head of WisdomTree Europe, their position in customer portfolios is as follows:
In Europe, most digital asset exchange-traded products are comprised of exchange-traded notes (ETNs) rather than funds. Investors in an ETN hold debt securities, while ETF shareholders hold shares of the fund’s underlying assets.
Moreover, US-based investment management firm VanEck has taken a more active marketing approach for its cryptocurrency products in Europe since the US Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs two weeks ago. He expressed his intention to pursue it.
According to Martijn Rozemuller, CEO of VanEck’s European operations, in addition to increasing investor interest in cryptocurrencies, the SEC’s decision likely strengthened VanEck’s brand in Europe due to media coverage of the Bitcoin ETF.
Products listed in the U.S. may be more liquid and may be attractive to European investors because the markets are larger and not spread out across multiple exchanges as seen in Europe.
SEC Approval Creates Fee Competition
The US SEC has approved the listing of spot Bitcoin ETFs on local exchanges from prominent issuers including BlackRock, Fidelity, Grayscale, ARK 21Shares, VanEck, Valkyrie, Bitwise, WisdomTree and Invesco. This has created unprecedented new product offerings for U.S. investors who previously had to rely on Canadian or European providers for exchange-traded exposure to cryptocurrencies.
During the application process, several providers have reduced their fees as the U.S. market works to establish a new balance between supply and demand. As a result, the price range was significantly lower than existing tracking products in Europe.
Investment management firm Ark Investment Management initially proposed a US ETF price of 0.8%. However, it was launched with no fees for the first six months or until assets reach $1 billion. After this period, the fee will be 0.21%.
Likewise, BlackRock investors will pay a 0.25% fee for the product, and early investors will receive a 0.12% fee for the first year until assets reach $5 billion.
All ETFs are expected to deliver the same returns, so fees play an important role in attracting new assets. However, most providers could close in the “medium term” due to low fee structures that are very difficult to maintain, according to analysts.
In response to the influx of new spot Bitcoin ETFs in the US, Invesco and WisdomTree have decided to lower fees on their Bitcoin products in Europe to withstand competition.
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About the author
Alisa is a reporter for Metaverse Post. She focuses on everything related to investing, AI, metaverse, and Web3. Alisa holds a degree in Art Business and her expertise lies in the fields of art and technology. She developed a passion for journalism through her work with VCs, notable cryptocurrency projects, and science writing. You can contact us at (email protected).
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alice davidson
Alisa is a reporter for Metaverse Post. She focuses on everything related to investing, AI, metaverse, and Web3. Alisa holds a degree in Art Business and her expertise lies in the fields of art and technology. She developed a passion for journalism through her work with VCs, notable cryptocurrency projects, and science writing. You can contact us at (email protected).
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