On Monday, Invesco and Galaxy Asset Management announced that they are slashing the sponsorship fee for their Bitcoin spot exchange-traded fund (ETF) – Invesco Galaxy Bitcoin ETF (BTCO).
According to a filing with the US Securities and Exchange Commission (SEC) on Monday, the index providers will cut their ETF’s fee from 0.39% to 0.25%, bringing BTCO on par with most fellow issuers. Spot Bitcoin ETFs from ARK 21 Shares, Bitwise, and Franklin Templeton offer the lowest fee of the lot.
Invesco Galaxy will Continue to Slash BTCO’s Fee Until it Reaches $5 Billion in AUM
Invesco Galaxy said it will continue waiving BTCO’s fee for the first six months of operations until the fund reaches $5 billion in assets under management (AUM). Both companies believe the move will eventually bring the total expense ratio of BTCO to 0 basis points. There are also plans to extend the fee waiver even further.
While the Bitcoin spot ETF market has been dominated by offerings from Grayscale (GBTC), BlackRock (IBIT), and Fidelity (FBTC), Invesco and Galaxy’s BTCO is placed sixth in terms of trading volume. Since its launch on January 11, BTCO has amassed over $280 million in buying and selling activity. The ETF reportedly manages about the same amount of capital in assets under management.
For comparison, BlackRock’s iShares Bitcoin Trust ETF (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC) have attracted close to $4 billion in total trading volume in the first 11 days of trading.
On January 25, investors purchased roughly $170 million worth of shares on BlackRock’s Bitcoin ETF. This resulted in the fund acquiring nearly 4,300 BTC, bringing its total holdings to 49,952 BTC worth $2.1 billion.
The occasion was a milestone for IBIT as it became the third-largest ETF in asset accumulation among the 600 exchange-traded funds that were issued between 2023 and 2024.
Fidelity’s FBTC is following closely behind as it is poised to cross the coveted $2 billion valuation soon. The fund currently holds 44,000 BTC in assets under management, which is equivalent to approximately $1.85 billion.
Grayscale’s GBTC is the Priciest and Franklin Templeton’s EZBC is the Cheapest Bitcoin Spot ETF
Digital asset manager Grayscale’s fund, the Grayscale Bitcoin Trust (GBTC), is currently the priciest of the spot Bitcoin ETFs that began trading earlier this month. Meanwhile, Franklin Templeton’s Franklin Bitcoin ETF (EZBC) is considered to be the cheapest.
GBTC charges a 1.5% sponsor fee, which was brought down from 2% following heavy criticism from investors. Meanwhile, BlackRock charges 0.12% for its IBIT, which is said to be one of the most attractive Bitcoin-focused ETFs on offer. The $9 trillion asset manager is expected to increase its fee to 0.25% next year.
Grayscale Bitcoin Trust is the world’s largest Bitcoin fund, with 581,274 BTC worth $23.2 billion in assets under management.
Total Amount of Bitcoin Purchased by ETF Issuers Already Surpassed MicroStrategy’s Reserve Holdings
Traditional finance index issuers are on a Bitcoin buying spree, indicating growing demand for the apex cryptocurrency among institutional and retail investors.
Last week, it was reported that nine of the spot Bitcoin ETFs, including IBIT and FBTC, acquired 102,613 BTC within the first seven days of trading. The amount is equivalent to over $4 billion in Bitcoin.
The funds now collectively manage over 50% of the total Bitcoin held by Michael Saylor’s MicroStrategy, the company considered to be the largest corporate holder of the leading cryptocurrency. The business intelligence firm holds an aggregate of 189,150 BTC worth over $7.5 billion in its reserves.
At the time of writing, Bitcoin (BTC) is trading at $43,393 – up 3% in the last 24 hours.
