VanEck Reduces Fees to Zero for Bitcoin Spot ETF Amidst All-Time High Inflows
Mitchell Nixon
Asset manager VanEck has announced a reduction of all sponsor fees to zero for the initial $1.5 billion in its Bitcoin Trust ETF until March 31, 2025. The sponsor fee, initially set at 0.20% of net assets under management for funds surpassing $1.5 billion, is now eliminated as a promotion of confidence in Bitcoin.
The VanEck Bitcoin Trust ETF, approved by the U.S. Securities and Exchange Commission (SEC) on January 4, currently holds $297.86 million in assets with 4,299 Bitcoin. Since its inception two months ago, the ETF tracking Bitcoin’s performance has yielded an 87.7% return.
IMPORTANT UPDATE!
Because we believe in #bitcoin so much, starting tomorrow, you can invest in VanEck Bitcoin Trust (HODL) with no fees until March 31st, 2025.*
*During the period commencing on March 12, 2024, and ending on March 31, 2025, the Sponsor will waive the entire…
— VanEck (@vaneck_us) March 11, 2024
While the SEC was assessing spot Bitcoin ETF applications, a price war erupted among ETF managers over management expenses. The Grayscale Bitcoin Trust initially had a 2% annual management fee, but with the advent of competitors, the industry average has plummeted to below 0.30%.
On the same day, Eric Balchunas, a senior ETF analyst at Bloomberg, highlighted in his research that the ten listed spot Bitcoin ETFs in the U.S. have reached a record-high total of $55 billion in assets under management and $110 billion in total traded volume.
“If these were the numbers at the end of year I’d call them a success. To do it in eight weeks is simply absurd,” Balchunas stated, adding:
“That said, I wouldn’t get crazy with growth predictions like ‘they could challenge SPX ETFs’. Here’s [a] look [at] them vs other categories. Tech ETFs (which is just one sector of US mkt) is massive. Plus [it is] hard to pass core categories when they [are] used as satellite positions.”
Bitcoin ETFs have exceeded the size of S&P 500 Industrial ETFs, yet they still lag behind the assets under management of S&P 500 Low Volatility sector ETFs. Moreover, they are considerably distant from the trillions of dollars managed in gold ETFs. As of the current publication, Bitcoin is trading at an all-time high price of $71,870.