Low US spot bitcoin ETF fees spark ongoing price decreases in Europe

CoinShares is the latest firm set to slash fees on its European bitcoin product in the weeks after the first spot BTC funds launched in the US.

The company said Thursday it would reduce the annual fee on its physically backed bitcoin exchange-traded product (ETP) from 0.98% to 0.35%. The change is slated to take place on Feb. 1. 

“We are confident that as the market for crypto assets continues to mature and expand, our assets under management will grow significantly,” Frank Spiteri, CoinShares’ head of asset management, told Blockworks in an email. “This growth in assets will, over time, more than offset the short-term impact of reduced fees.”

Read more: Bitcoin ETF Tracker

The move matched that made by rival WisdomTree last week, when the company chose to reduce the fees on its bitcoin and ethereum ETPs from 0.95% to 0.35%. The firm also cut its fees on six other products, including reductions for its Crypto Market ETP and Crypto Altcoins ETP — from 1.45% to 0.70%.

The eight WisdomTree ETPs trade on Börse Xetra and the Swiss Stock Exchange known as SIX, as well as Euronext exchanges in Paris and Amsterdam.

The Securities and Exchange Commission’s landmark approval of funds that hold bitcoin directly has reignited discussions around retail and institutional demand for crypto, according to Alexis Marinof, WisdomTree’s head of Europe.

Those US funds have notched net inflows of $824 million after nine days of trading. When excluding the heavy outflows endured by Grayscale Investments’ Bitcoin Trust ETF (GBTC), the combined net inflows amount to about $5.2 billion. 

“The launch of spot bitcoin ETFs in the US has captured a lot of attention in Europe, yet many investors aren’t aware that they’ve been able to access the same spot crypto exposure through physically backed ETPs since 2019,” Marinof said in a statement last week. 

Like WisdomTree, fund giant Invesco last week lowered the fee for its Physical Bitcoin ETP — from 0.99% to 0.39%.

Gary Buxton, Invesco’s head of Europe ETFs, told the Financial Times the drop came after issuers launching spot bitcoin ETFs in the US “worked to find the new equilibrium between supply and demand.”

Nine of those 10 US funds sport fees ranging from 0.19% to 0.39% — with Grayscale’s product being an outlier, at 1.5%. 

Read more: Investors are ‘the clear winners’ as bitcoin ETF fee battle comes into focus

“The competitive levels of fees in recent US ETF launches have indeed played a part in our global strategy towards pricing,” Spiteri said. “It’s important to note, however, that our decision to lower fees on our ETPs in Europe was not solely a reaction to these trends.”

WisdomTree and Invesco both offer a US spot bitcoin ETF in addition to their European offerings. CoinShares recently exercised its option to acquire the fund arm of Valkyrie Investments, which also launched a US spot bitcoin fund.

The WisdomTree Bitcoin Fund (BTCW) and the Invesco Galaxy Bitcoin ETF (BTCO) carry a fee of 0.30% and 0.39%, respectively. The Valkyrie Bitcoin Fund (BRRR) is priced at 0.25%.

Franklin Templeton currently offers the lowest fee for a US spot bitcoin ETF, at 0.19%.

A European bitcoin ETP by 21Shares has a management fee of 0.21% — though that product takes part in collateralized lending to achieve that price point.

Updated Jan. 25, 2023 at 4:05 pm ET: Added quote from CoinShares’ head of asset management.

---

Get the news in your inbox. Explore Blockworks newsletters:

• Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
• Empire: Start your morning with the top news and analysis to inform your day in crypto.
• Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
• 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
• Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
• The Drop: For crypto collectors and traders, covering apps, games, memes and more.
• Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.