Invesco and Galaxy Asset Management have intensified the competition in the spot Bitcoin ETF market by announcing a significant reduction in fees for the Invesco Galaxy Bitcoin ETF (ticker BTCO). The ETF’s expense ratio will drop from 0.39% to 0.25%, with fees waived for the first six months or until reaching $5 billion in assets. Despite this fee cut, BTCO remains behind competitors in terms of cost, with Franklin Templeton’s ETF boasting the lowest expense ratio at 0.19%. The move comes amidst a heated fee war in the nascent industry, with major players like BlackRock Inc. and Fidelity dominating inflows.
In a bid to stay competitive in the rapidly evolving landscape of spot Bitcoin exchange-traded funds (ETFs), Invesco and Galaxy Asset Management have announced a significant reduction in fees for their joint venture, the Invesco Galaxy Bitcoin ETF (BTCO).
The latest move in the ongoing battle for market share sees BTCO slashing its expense ratio from 0.39% to 0.25%, effective immediately. Additionally, the fund will waive all fees for the first six months of operation or until it amasses $5 billion in assets under management, according to a statement released by the companies on Monday.
This fee reduction marks the continuation of a trend in the industry, where issuers are proactively lowering costs even before regulatory approval for spot Bitcoin ETFs was granted earlier this month in the United States. Notably, industry giants like BlackRock Inc. and Fidelity have surged ahead of the competition, collectively attracting around $4 billion in investor inflows, comprising approximately 70% of total spot Bitcoin ETF inflows. In contrast, BTCO currently ranks fifth in terms of inflows, with approximately $283 million in assets.
Despite Monday’s fee cut, BTCO still lags behind its rivals in terms of affordability. Franklin Templeton’s spot Bitcoin ETF boasts the lowest expense ratio in the market at 0.19%, even after accounting for post-waiver costs.
Following the fee reduction announcement, shares of BTCO experienced a 2.8% surge on Monday, mirroring a similar increase in the price of Bitcoin itself.
In conclusion, Invesco and Galaxy’s fee reduction for the Invesco Galaxy Bitcoin ETF underscores the intense competition within the spot Bitcoin ETF market. As issuers vie for investor attention and market dominance, the battle over fees is likely to continue as the industry matures and evolves.
