- Invesco and Galaxy Asset Management lower fees for their joint spot bitcoin ETF, BTCO, amid intense competition.
- BTCO’s expense ratio reduced from 0.39% to 0.25%, with waived fees for the first six months or until reaching $5 billion AUM.
- Move aims to enhance fund appeal and compete with sector leaders, though not the lowest-cost option in the market.
- Despite competitive landscape, BTCO shares experience a 2.8% increase in response to the fee reduction.
Invesco and Galaxy Reduce Fees in Competitive Spot Bitcoin ETF Race
In a strategic maneuver within the fiercely contested spot bitcoin exchange-traded fund (ETF) market, Invesco and Galaxy Asset Management have announced a fee reduction for their joint venture, the Invesco Galaxy Bitcoin ETF (BTCO). This decision comes amidst an ongoing fee war among issuers vying for dominance in this burgeoning financial arena.
The adjusted fee structure brings BTCO’s expense ratio down to 0.25%, a decrease from its previous rate of 0.39%. Moreover, Invesco has introduced a fee waiver for the initial six months or until the ETF accumulates $5 billion in assets under management (AUM). This aggressive pricing strategy is designed to enhance the ETF’s attractiveness to investors and bolster its competitive standing against established industry players.
Despite the fee adjustment, BTCO remains slightly higher in cost compared to other offerings in the market, notably trailing Franklin Templeton’s spot bitcoin ETF with an expense ratio of 0.19% post-waiver. However, the revised fee structure positions BTCO more competitively against its counterparts. Meanwhile, Grayscale’s ETF, while retaining its premium pricing, is witnessing notable outflows.
Following the recent regulatory approval for spot bitcoin ETFs in the U.S., there has been a discernible shift in investor preferences, with industry giants like Blackrock Inc. and Fidelity capturing a substantial market share, collectively amassing approximately $4 billion in inflows, representing around 70% of the total spot bitcoin ETF inflows. In contrast, BTCO currently holds approximately $283 million in assets.
Despite the fierce competition, BTCO experienced a 2.8% surge in share value on Monday, aligning with a similar uptrend observed in the price of bitcoin. This positive market response indicates investor approval of the fund’s revised pricing strategy.