Bitcoin ETF starting gate: A look at the spot funds set to start trading today

By admin On Jan 11, 2024 2 0

The Securities and Exchange Commission cleared 11 spot bitcoin ETFs Wednesday.

Now, those funds are preparing to start trading.

The SEC first approved what are known as 19b-4 proposals filed by the Cboe BZX Exchange, Nasdaq and NYSE Arca — the stock exchanges on which the funds are to be listed.

Registration statements, or S-1s, by the issuers were then made “effective” — a final step toward launch.

With a bunch of similar ETFs set to launch Thursday, industry watchers have said competition among the bitcoin funds will be fierce. The various asset managers have so far looked to differentiate via low fees and marketing campaigns.

Here’s a look at the issuers set to launch the first spot bitcoin ETFs in the US.

BlackRock

Fund name: iShares Bitcoin Trust (IBIT)

Exchange: Nasdaq

Fee: 0.25% (0.12% for the first 12 months, or $5 billion)

BlackRock entered the spot bitcoin ETF race last June. The move from the world’s largest asset manager was seen by many as positive, given its TradFi standing, size and stellar record of getting funds approved by the SEC.

The team at BlackRock was busy in November and December, meeting with the SEC five times. In total, the SEC held over 20 meetings with potential issuers.

Neena Mishra, director of ETF research at Zacks Investment Research, previously told Blockworks she would bet on BlackRock’s spot bitcoin ETF to gain the favor of many investors.

“What’s not to like about a low-cost product from the world’s largest asset manager that seems perfect for an advisor or investor looking for safe and convenient bitcoin exposure?” she said.

Fidelity

Fund name: Fidelity Wise Origin Bitcoin Fund (FBTC)

Exchange: Cboe BZX

Fee: 0.25% (0.0% through July 31, 2024)

Like BlackRock, Fidelity is one of the largest financial companies in the world — with $11.5 trillion assets under administration.

The financial services giant rejoined the spot bitcoin race last June, having previously filed for the Wise Origin Bitcoin Trust in 2022. Fidelity’s Canadian subsidiary previously launched a similar product on the Toronto Stock Exchange.

As for fees, the firm announced a fee of 25 basis points, lowering its fee earlier this month after previously proposing a 39 basis point fee. The fund is also waiving the fee until July 31, 2024.

Ark Invest, 21Shares

Fund name: Ark 21Shares Bitcoin ETF (ARKB)

Exchange: Cboe BZX

Fee: 0.21% (0.0% for first six months, or $1 billion)

The 2023 proposal from Ark Invest and 21Shares was the first in line for approval or denial by the SEC. The agency had until Jan. 10 to make a decision following multiple delays.

Unlike BlackRock, Ark Invest and 21Shares previously filed for a spot bitcoin ETF — though, like it did to others, the SEC blocked the bid. 21Shares operates a number of crypto exchange-traded products in Europe.

Ark Invest CEO Cathie Wood correctly predicted that while her firm was first in line, the SEC was likely to approve multiple such funds at once.

Similar to other issuers, Ark and 21Shares lowered its fee ahead of the SEC decision, dropping the price point by four basis points in a Wednesday filing.

Ark Invest exited its position in the Grayscale Bitcoin Trust (GBTC) ahead of the SEC approval. The move was seen by Bloomberg Intelligence analyst Eric Balchunas as a way for the company to potentially give its “own ETF a nice [assets under management] boost.”

Bitwise

Fund name: Bitwise Bitcoin ETF (BITB)

Exchange: NYSE Arca

Fee: 0.20% (0.0% for first six months, or $1 billion).

Bitwise filed for a physically backed bitcoin ETF in 2019, but withdrew its request in January 2020 amid SEC concerns. The crypto-focused fund group would start another unsuccessful attempt in October 2021.

It then was among the issuers that refiled for such a fund in the weeks after BlackRock revealed its proposal last June. Bitwise most recently published research in September addressing rebuttals to various bitcoin ETF filings over the years.

Bitwise was one of the first to market its ETFs prior to approval. The firm tapped actor Jonathan Goldsmith — known as the most interesting man in the world from Dos Equis ads — for several spots.

Grayscale

Fund name: Grayscale Bitcoin Trust (GBTC)

Exchange: NYSE Arca

Fee: 1.5%

Grayscale is a bit different from the other issuers, as it filed to convert its existing Grayscale Bitcoin Trust (GBTC) to an ETF. It thus comes in to spot bitcoin ETF launch day with a large asset base.

GBTC launched in 2013 and has more than $28 billion in assets under management. The trading of GBTC had historically been limited to OTCQX.

The…