Bitcoin ETF Fee Wars Heat Up: Invesco And Galaxy Asset Management Reduce Fees To Take On Competition

In a calculated move to draw in more investors, Invesco and Galaxy Asset Management have slashed the fee of their joint Bitcoin BTC/USD exchange-traded funds (ETFs).

What Happened: The issuers have trimmed down the fee of their spot Bitcoin ETF from 0.39% to 0.25%. This aligns the sponsor fee for the Invesco Galaxy Bitcoin ETF (BTCO) with that of most competing issuers. Only a select few, such as Ark, 21Shares, Bitwise and Franklin Templeton, extend lower fees compared to the rest, reported CoinDesk on Monday.

Additionally, Invesco has pledged to waive fees for the initial six months or until the ETF amasses $5 billion in assets, as per their statement. However, Invesco’s Bitcoin spot ETF has experienced a somewhat lackluster start, gathering just over $280 million in inflows since its launch. This contrasts with similar ETFs from BlackRock and Fidelity, which have recorded roughly $2 billion in total volume in their first 11 days.

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Why It Matters: Lower fees tend to make ETFs more attractive to investors, which could help Invesco generate higher inflows and potentially improve the performance of its Bitcoin ETF.

The fee cut also aligns Invesco with the market practices of most fellow issuers, providing it with competitive parity. However, it will face stiff competition from issuers like Ark, 21Shares, Bitwise, and Franklin Templeton, who offer even lower fees.

The Bitcoin ETF offered by Franklin Templeton boasts the smallest fee among its peers at just 0.19%. Additionally, the company has implemented a fee waiver that is set to last until August 2, or until the ETF’s assets reach $10 billion.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.