Issuers of European crypto ETPs have started to reduce management fees

The reason was more competitive fees for US products

23.01.2024 - 09:30

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2 min

What’s new? Investment firms Invesco and WisdomTree have cut their fees for managing bitcoin-based exchange-traded products (ETPs) in Europe by more than 60%, FT journalists report. The reason was lower fees at US spot bitcoin exchange-traded funds (ETFs) admitted to the market on January 11. According to Invesco’s regional head of ETFs Gary Buxton, the launch of BTC ETFs in the United States has led to an “unprecedented supply of new products.”

FT’s material

What else is known? Previously, US investors had to turn to Canadian and European providers to access cryptocurrency ETPs, with the launch of such products in the local market with lower fees, this was no longer necessary.

As a result, management fees for WisdomTree Physical Bitcoin ETP have been reduced from 0,95% to 0,35%, and in the case of Invesco Physical Bitcoin ETP from 0,99% to 0,39%. The changes will take effect by the end of this month.

Both companies are also among the issuers of spot BTC ETFs in the US. The WisdomTree (ticker BTCW) and Invesco funds, issued in conjunction with Galaxy Investment Company (BTCO), are available on the CBOE exchange.

BTCW has a 0,5% management fee, while BTCO has no fees for the first six months after launch, or until the fund has raised $5 billion, after that the fee is 0,39%.

In addition, in Europe, virtually all exchange-traded crypto products are structured as exchange-traded notes (ETNs) rather than funds. ETN investors own the debt security, while ETF share holders own a portion of the fund’s underlying assets, in this case, bitcoins.

Earlier, CoinShares also noted the migration of assets from Europe and Canada to the US, where crypto ETP management fees are more competitive.

In the 6 days since the start of trading, issuers of spot BTC ETFs in the US cumulatively bought 95 000 bitcoins. Fidelity’s FBTC and BlackRock’s IBIT are the leaders in terms of fund inflows, with figures above $1 billion.

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