The Growing Fee Wars in Bitcoin ETFs

It’s set to be a historic week in crypto, with the SEC widely expected to finally approve a spot Bitcoin ETF, although it’s not a 100% certainty. Two Bloomberg analysts who have followed all the developments closely since the beginning, James Seyffart and Eric Balchunas, join Unchained to discuss the final filings, the likely schedule, and whether all the applications are likely be approved on the same day. Then they dive into the real action: the cutthroat wars that have already begun, why Grayscale might be keeping its fees on the Grayscale Bitcoin Trust so high, and who the likely winners in what has traditionally been a “winner take most” category will be. 

Listen to the episode on Apple Podcasts, Spotify, Fountain, Overcast, Podcast Addict, Pocket Casts, Pandora, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform.

Show highlights:

• What the recent 19b-4 and S-1 filings say about how close the ETFs are to approval
• Whether Hashdex's existing futures ETF impacts its treatment in the spot Bitcoin ETF process
• The likely timeline for trading to start post-ETF approval
• The possibility of simultaneous launches for all approved ETF issuers
• The SEC's concerns about ensuring a fair launch, informed by the BITO experience
• Eric’s surprise at JP Morgan's involvement as an Authorized Participant
• Why the SEC is approving the ETF despite Gensler’s stance against crypto
• What extreme cases Eric believes might cause the ETF not to be approved 
• How BlackRock's low fees set a challenging benchmark for competitors
• The potential for an issuer to offer even lower fees than current players
• How issuer margins are thin due to marketing fees, and the impact of waivers
• James’ theory about why Grayscale might be keeping the fee on GBTC so high
• Predictions about which issuer(s) will gain the bulk of assets under management
• The rumor about BlackRock introducing substantial liquidity on the ETF's first day
• Eric and James's expectations for ETF inflows and market dynamics

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Guest:

• James Seyffart, Research analyst at Bloomberg Intelligence
• Previous appearances on Unchained:
• Why the SEC May Want Cash Creation of Spot Bitcoin ETFs
• Why It Looks Like BlackRock Could Win America’s First Spot Bitcoin ETF
• Why a Spot Bitcoin ETF Will Probably Launch No Later Than January 10
• Eric Balchunas, Senior ETF analyst at Bloomberg Intelligence
• Previous appearances on Unchained:
• Will a Spot Bitcoin ETF Finally Get Approved?

Links

• Previous coverage of Unchained on spot Bitcoin ETFs:
• The 4 Factors That Will Determine Which Spot Bitcoin ETFs Win Market Share
• How Much Money Will Flow Into Bitcoin ETFs? Here’s One Projection
• The Chopping Block: Are We Back? The ‘Low IQ’ Response to the Potential Spot Bitcoin ETF

Fees 

• Unchained: Fee Competition Heats Up Among BlackRock and Other Spot Bitcoin ETF Applicants
• Caitlin Long’s tweet warning about no fees
• Fidelity set their fee to .39%
• Invesco/Galaxy chose to waive fees

Market participants:

• Unchained: Goldman Sachs Could Take Vital Role in BlackRock, Grayscale Spot Bitcoin ETFs: Report
• The Block: Nasdaq to meet with SEC today to discuss spot bitcoin ETFs: Source
• Reuters: BlackRock, VanEck among asset managers that submitted updated filings for spot bitcoin ETF
• CoinDesk: BlackRock, Valkyrie Name Authorized Participants Including JPMorgan for Bitcoin ETF

Others:

• Better Markets’ letter: The SEC Must Follow the Law and Reject Spot Bitcoin ETPs Which Will Inflict Massive Investor Harm
• FXSTREET: BlackRock might be on track to create history with $2 billion inflows in spot Bitcoin ETF in a week
• Eleanor Terrett of Fox News’ tweet on Better Markets’ letter
• Scott Johnson of Van Buren Capital’s estimate

Learn more: 

• Unchained: 
• Bitcoin ETFs Explained: What Are They & How Do They Work?
• Why The Spot Bitcoin ETF Is a Big Deal
• Deciding on Bitcoin: Should New Investors Jump In Now or Wait for an ETF?

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