VanEck slashes Bitcoin spot ETF fees to zero amid ATH inflows

Since their inception in January, U.S. spot Bitcoin ETFs have attracted billions in inflows.

Asset manager VanEck will reduce all sponsor fees to zero for the first $1.5 billion of funds in its Bitcoin Trust ETF until March 31, 2025.

According to the March 11 announcement, the sponsor fee is levied at 0.20% of net assets under management for funds exceeding $1.5 billion. “Because we believe in #bitcoin so much, starting tomorrow, you can invest in VanEck Bitcoin Trust (HODL) with no fees until March 31, 2025,” the asset manager wrote.

The VanEck Bitcoin Trust ETF was approved by the U.S. Securities and Exchange Commission (SEC) on Jan. 4 and currently has $297.86 million in assets under management, with 4,299 Bitcoin (BTC) in its holdings. Tracking the performance of Bitcoin, the exchange-traded fund (ETF) has returned 87.7% since its inception two months ago.

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— Gemini (@Gemini) March 11, 2024

Even as the SEC was reviewing spot Bitcoin ETF applications, ETF managers had begun a price war over their funds’ management expenses. Before the entry of competitors, the Grayscale Bitcoin Trust had annual management fees of 2%. The industry average has since dropped below 0.30%. 

The same day, Eric Balchunas, senior ETF analyst for Bloomberg, noted in his research that the ten spot Bitcoin ETFs listed in the U.S. have accumulated an all-time high of $55 billion in combined assets under management and $110 billion in total volume traded. “If these were the numbers at the end of year I’d call them a success. To do it in eight weeks is simply absurd,” Balchunas wrote, adding: 

“That said, i wouldn’t get crazy with growth predictions like ‘they could challenge SPX ETFs’. Here’s look at them vs other categories. Tech ETFs (which is just one sector of US mkt) is massive. Plus hard to pass core categories when they used as satellite positions.”

The size of Bitcoin ETFs has surpassed S&P 500 Industrial ETFs but remains behind the assets under management of S&P 500 Low Volatility sector ETFs and are nowhere close to the trillions of dollars managed in gold ETFs. At the time of publication, Bitcoin is trading at a record-high price of $72,721.

Related: Bitcoin halving: What’s different this time around?