Despite fears that BlackRock’s ETF would be priced too much for investors, the asset manager has set a fee that is notably lower than some peers. On Monday, the asset manager disclosed the fee for its iShares Bitcoin Trust in amended S-1 filings. The fund will charge 20 basis points for the first year, or until it reaches $5 billion in assets, before settling at 30 bps. This aligns with what Bloomberg Intelligence ETF analyst James Seyffart had expected.
BlackRock’s move follows several other applicants to list a spot bitcoin ETF lowering their fees, including Fidelity and Valkyrie Investments. The lower fees have fueled more optimism that the ETFs will gain approval by the U.S. Securities and Exchange Commission, more than a decade after the regulator rejected previous attempts to launch such products.
Several other applicants, including Ark Invest/21Shares, VanEck, and WisdomTree, have already filed amended forms with the SEC to show that they are ready to launch their planned ETFs if the regulator gives its blessing. Those applications include a disclosure of the issuers’ sponsor fees. In addition to BlackRock’s 0.3% fee, VanEck has revealed the lowest sponsor fee of the bunch at just 0.25%. Other sponsors, such as EDX Markets and Fidelity, have higher fees.
The SEC’s key concern about a spot bitcoin ETF has been the potential for manipulation, and BlackRock’s revised filings have proposed steps to minimize that risk. One of the most significant revisions relates to how Wall Street firms could invest in the product, with a new “in-kind redemption prepay” model allowing institutions to create shares by depositing cash instead of actual bitcoin.
These changes, along with other proposals that seek to reduce risk and provide protections for investors, appear to have convinced the SEC to take a second look at BlackRock’s proposal. The SEC will consider the amended form for a spot bitcoin ETF when it meets on Jan. 10.
Investors are eager to see if the SEC will approve a spot bitcoin ETF. If so, it will mark a significant milestone for the crypto industry and make digital assets more accessible to a broader group of investors.
This is not the first time a new ETF has been proposed for spot bitcoin. Still, many previous efforts have been rebuffed by the SEC, with the regulator citing concerns about price volatility, market manipulation, and lack of investor protections. The recent wave of applications has fueled renewed excitement for the sector, pushing some token prices to double over the past month. However, those gains are not without their skeptics. It will take more than one successful product to dispel the cynicism that has dogged the space for years. Investors will want to see more concrete signs that the iShares Bitcoin ETF is on solid footing before they commit to putting their money behind it. The only way to do that is to wait and see what the regulator does next.