WisdomTree and Valkyrie Take the Plunge
Asset managers, WisdomTree and Valkyrie Investments, are the latest players in the spot Bitcoin ETF arena to announce fee waivers, intensifying the ongoing 'fee wars.' Bloomberg ETF analyst James Seyffart reveals that WisdomTree will waive fees for the initial $1 billion or six months, reducing fees from 0.30% to zero. Simultaneously, Valkyrie Investments opts for a three-month fee waiver, slashing its fee from 0.49% to zero during the specified period.
Understanding Sponsor's Fees
Delving into the S-1 filings of both companies, it's evident that the fee waivers specifically target sponsor's fees. This term refers to fees collected by the sponsor – in this case, Valkyrie or WisdomTree – for services performed under the trust agreement and other sponsor-paid services. This move aligns WisdomTree and Valkyrie with four other ETF applicants – Bitwise, Ark Invest, Invesco, and BlackRock (iShares) – who have also embraced fee waivers during this crucial period.
Fee Wars Escalate with Regular Fee Reductions
In a surprising turn of events, various firms engaged in a 'fee war,' not only introducing waivers but also slashing their regular fees. BlackRock, Ark Invest, WisdomTree, and Invesco strategically reduced or specified their fees on Jan. 8. Even Grayscale, with a notably higher fee, joined the trend, lowering its fee from 2% to 1.5% on the same day.
SEC Decision Anticipation
With many eyes on the U.S. Securities and Exchange Commission (SEC), anticipation builds for the potential approval of a spot Bitcoin ETF on Jan. 10. Several sources speculate that trading might commence in the days following approval. Despite the lack of certainty, the SEC's extensive engagement with applicants heightens expectations, especially with Ark Invest's crucial application awaiting a decision tomorrow.
Industry Shakeup
As fee waivers become the norm and 'fee wars' reshape the landscape, the spot Bitcoin ETF arena witnesses a transformative period. Asset managers strategically manoeuvre, aligning with regulatory expectations and competitive market trends. The SEC's looming decision adds an air of anticipation, making the upcoming days crucial for the future of spot Bitcoin ETFs.