Responding to the fierce competition in the spot bitcoin ETF market, Invesco and Galaxy Asset Management have lowered the long term fee of their joint BTCO fund, positioning it more competitively against sector heavyweights.
Invesco and Galaxy ETF Fee Slashed in Response to Intense Market Competition
In a strategic move to gain traction in the highly competitive spot bitcoin exchange-traded fund (ETF) market, Invesco and Galaxy Asset Management have reduced the fee for their joint spot bitcoin ETF, the Invesco Galaxy Bitcoin ETF (BTCO). This decision, announced on Monday, marks the latest move in the ongoing fee war amongst issuers of this new financial product.
The fee reduction brings BTCO’s expense ratio down from 0.39% to 0.25%. Additionally, Invesco has announced a waiver of these fees for the first six months or until the ETF reaches $5 billion in assets under management (AUM). This aggressive pricing strategy aims to bolster the fund’s appeal among investors and compete more effectively with dominant players in the sector.
Despite the fee cut, BTCO is not the lowest-cost option in the market. Franklin Templeton’s spot bitcoin ETF holds this distinction with a post-waiver expense ratio of 0.19%. However, the reduced fee places BTCO in a more competitive position against other industry players. Notably, Grayscale’s ETF remains the most expensive among the new offerings and is experiencing significant outflows.
Since the U.S. regulators green-lighted the launch of spot bitcoin ETFs earlier this month, there has been a noticeable shift in investor inflows. Industry giants such as Blackrock Inc. and Fidelity have captured a significant market share, attracting combined inflows of approximately $4 billion, representing roughly 70% of the total spot bitcoin ETF inflows. In contrast, BTCO has about $283 million.
Despite the competitive landscape, shares of BTCO experienced a 2.8% increase on Monday, mirroring a similar uptick in the price of bitcoin. This uptrend suggests a positive investor response to the fund’s new pricing strategy.
How low do you think the fees on these spot bitcoin ETFs will eventually settle at? Share your thoughts and opinions about this subject in the comments section below.
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