BlackRock’s Strategic Play: Undercutting Rivals With Lower Spot Bitcoin ETF Fees

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As the potential approval of several spot Bitcoin exchange-traded funds (ETF) by the United States Securities and Exchange Commission (SEC) approaches, BlackRock has made a significant move by announcing a comparatively low fee for its upcoming spot Bitcoin ETF earlier today.

BlackRock Takes Competitive Edge In Spot Bitcoin ETF Race

In a report published by Reuters in the early hours of Monday, the asset management giant announced that it has now set the fee at 0.20 percent for its iShares Bitcoin Trust, then increasing its fees to 0.30 positioning itself competitively against its rivals.

bitcoin blackrock bitcoin etf btc btcusdt
BTC ETFs and their different trading fees. Source: Bloomberg via Meltem Demirors on X

This strategic pricing undercuts the fees of Valkyrie Investments and Fidelity, which stand at 0.80 percent and 0.39 percent, respectively, for their spot BTC ETF offerings.

This latest report suggests that the race to launch a successful spot Bitcoin ETF in the US has intensified, with over a dozen contenders, including crypto natives and traditional financial powerhouses.

Among these, VanECK and ARK 21Shares Bitcoin ETF also stand out, with its fee set at 0.25 percent, as announced on the same day. These developments indicate a growing trend of competitive pricing strategies among spot ETF providers to capture a larger share of the burgeoning crypto investment market.

Bitcoin (BTC) price chart on TradingView
BTC price is moving sideways on the 4-hour chart. Source: BTC/USDT on

Approaching SEC Deadline Spurs Bold Predictions

While the rivalry for the BTC spot ETF with the lowest prices continues, the US SEC, led by Chair Gary Gensler, has set a pivotal deadline for spot BTC ETF issuers. This decision, which requires final revisions to pending S-1 applications by January 8, 2024, has sparked a flurry of predictions in the crypto community.

Bloomberg reports that the US SEC could allow trading of spot BTC ETFs as soon as January 11, making this a potentially transformative week for the crypto investment landscape.

Nate Geraci, the president of the ETF store, also projected that the US SEC will give its nod of approval to spot Bitcoin ETF applications by January 10. His predictions include approvals for 19b-4s (exchange rule changes) and registration statements.

2) Obviously, SEC’s approval vote (which sounds likely on Wednesday)…

SEC Division of Trading & Markets must approve 19b-4s (exchange rule changes).

Division of Corporate Finance must sign-off on S-1s (registration statements).

Key is 19b-4 approval orders, which I expect.

— Nate Geraci (@NateGeraci) January 8, 2024

According to Geraci, the immediate aftermath of the SEC’s approval could see the launch of these spot ETFs from various applicants. Matthew Sigel, the head of digital asset research at VanEck, disclosed that BlackRock could potentially invest a substantial $2 billion from existing Bitcoin holders into spot BTC ETFs.

VanEck’s Matthew Sigel just said he’s heard from a well placed source that BlackRock has $2 billion of capital lined up from existing bitcoin holders that want to rotate into spot bitcoin ETFs in week one 👀

— Tim Copeland (@Timccopeland) January 5, 2024

Furthermore, Geraci highlights the potential impact on key players like ARK Invest and Grayscale Investments. The ETF store president suggests that ARK Invest could channel over $200 million into these ETFs, replacing GBTC in ARKW.

For Grayscale, the approval could elevate its standing significantly, placing it among the top 60 ETFs by assets under management, according to Geraci.

Featured image from Unsplash, Chart from TradingView

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