Van Eck signals possible start of an unscrupulous” Bitcoin ETF War

A potentially "brutal" price war for Bitcoin stock market trading funds listed in the USA could begin on Monday, less than a week after the introduction of the first such vehicle.

Van Eck has submitted Securities and Exchange Commission to the US stock exchange supervisory authority to "launch as soon as possible" its Bitcoin Strategy ETF (XBTF) and signal that it will charge an administrative fee of only 65 basis points.

This undercut the 95BP fee of the ProShares Bitcoin Strategy ETF (Bito), which accumulated more than $ 1 billion in assets after he had recorded the strongest ETF start of all time last week. The Bitcoin Fund (BTF) from Valkyrie Investments, which joined the fight on Friday, also has a fee of 95 BP.

Nathan Geraci, President of the ETF Store, a financial advisor based in Kansas, believed that this will probably only be the first stage in a struggle for investors' wallet.

"Bito has already developed a great advantage as a first mover.. The attention of this product is unique in the history of ETFs," argued Geraci.

"That means that at the end of the day, Bitcoin-Futures-ETFS are raw material products. The costs are important and I expect a brutal war of defendation in this category.

Kenneth Lamont, senior fund analyst for passive strategies, said that there is "definitely a first-mover advantage" for Bito, but believed that "if there is a significant difference in fees, we will see that investors change".

"If you look at other markets, you would have seen a similar story about the years. I don't think Bitcoin is immune to the market pressure," added Lamont.

Vaneck's fee is also significantly cheaper than the 95BP, which is collected by the Wisdomtree Bitcoin ETP (BTCW)-the most cost-effective stock market-traded Bitcoin product, which, according to data from Trackinsight, is available on the European market, which is well developed.

The WisdomTree fund, like most in Europe, is physically covered by Bitcoin and not like its US counterparts on the futures market. The SEC has not yet approved a request for CASA-price-based crypto ETFs.

The only cheaper Bitcoin ETF in the world, the physically secured Ci Galaxy Bitcoin ETF (BTCX), which is listed in Canada, costs 40 BP.

Vaneck's European range of stock market-traded crypto notes that map five virtual currencies including Bitcoin costs between 1 and 1.5 percent. Vaneck refused to comment on this story.

Michael Sapir, CEO of ProShares, defended Bito's fee with the argument that the fund is actively and not passively managed, whereby the dealers of Proshares "use our expertise in order to automatically contracts" instead of automatically before the expiry.

However, Lamont was not convinced that this should be an important factor. "You call it active, but the active decision as to when Futures should be rolled between one day and the next is not like an active stock manager," he argued.

The emerging war of fees gives the dominant Grayscale Bitcoin Trust (GBTC) - a private trust that invests in the spot market - with $ 42 billion, with an annual administrative fee of 2 percent.

David Lavalle, Global Head of ETFS at Grayscale, said he was obliged to reduce the fee if Grayscale is approved by the SEC to convert the Trust into a spot ETF, which was applied for last week, but no reduction was threatened.

"We have 3.5 percent of all Bitcoins in the world. This is the fee profile that we always had. We feel very comfortable because we have a product on the market that has a very strong liquidity and a very strong asset," said Lavalle, who argued that the cost of rolling Futures contracts caused by the first wave of US bitcoin ETFS have arisen, would mean that GBTC will achieve even higher returns despite the higher overall cost rate.