• Grayscale would have a difficult decision to make on fees metrics, if a spot BTC ETF approval came today.
  • Its GBTC product currently bears 2% fee, relative to the average 0.54% across US-listed ETFs, and 1.48% for global crypto ETPs.  
  •  This means the Bitcoin Trust would be at a disadvantage compared to the more affordable alternatives offered by rival issuers.

Grayscale asset management firm recently won in its months-long case against the US Securities and Exchange Commission (SEC). The judge determined that the regulator reviews its previous rejection of Grayscale’s application to have its Bitcoin Trust (GBTC), which is worth $17 billion, converted to a physically backed Exchange-Traded Fund (ETF). The decision could lead to the approval of the first spot Bitcoin ETF in the United States.

Also Read: Breaking: Grayscale wins lawsuit against US SEC, Bitcoin price nears $28,000

Grayscale deliberates fees ahead of spot BTC ETF approval

The resounding victory could have set the stage for another challenge in Grayscale’s mission to offer Bitcoin ETFs. According to a Bloomberg report, fees may present as the next obstacle, putting the asset manager at a disadvantage compared to other issuers in the race.

Specifically, if the SEC gives agrees to convert the GBTC to an ETF, Grayscale may have to revise its fees. This is because its peers in the spot BTC ETF race, comprising BlackRock, Invesco, and Fidelity, among others, over more affordable fees, averaging at around 0.54% across US-listed ETFs, and 1.48% for global crypto ETPs.  These low-cost fees are among the many reasons giving BlackRock the hope for speedy approval.

Considering the EF filings between the peers are just about similar, some issuers will leverage their fees for competitive advantage and as a distinguishing fact. Citing ETF Store president Nate Geraci:

Grayscale is up against issuers such as BlackRock and Invesco who are highly accustomed to bludgeoning each other on fees…sot-Bitcoin ETFs will all generally look the same – they simply hold Bitcoin — which makes fees a key differentiator.

Already, Grayscale has already started contemplating a slash of the fees, with CEO Michael Sonnenshein expressing the company’s commitment to reduce fees once GBTC converts to an ETF.

Fees as a concern in the ETF space

The place of fees in the ETF space is pronounced, especially where the number of potential issuers is many. BlackRock enjoys a competitive advantage for more reasons other than its expansive assets under management (AUM). This includes low fees.

Another issuer that is leveraging low-cost fees for competitive advantage is Roundhill, looking to introduce a product with a fee of 0.19%.  

Meanwhile, the market continues to wait for the SEC to give approvals with several deadlines due this week. 

Crypto ETF FAQs

What is an ETF?

An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.

Is Bitcoin futures ETF approved?

Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.

Is Bitcoin spot ETF approved?

Bitcoin spot ETF has been approved outside the US, but the SEC is yet to approve one in the country. After BlackRock filed for a Bitcoin spot ETF on June 15, the interest surrounding crypto ETFs has been renewed. Grayscale – whose application for a Bitcoin spot ETF was initially rejected by the SEC – got a victory in court, forcing the US regulator to review its proposal again. The SEC’s loss in this lawsuit has fueled hopes that a Bitcoin spot ETF might be approved by the end of the year.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.

More Altcoin News
Shanghai court confirms legal recognition of crypto ownership

Shanghai court confirms legal recognition of crypto ownership

A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.

More Cryptocurrencies News
BTC hits an all-time high above $97,850, inches away from the $100K mark

BTC hits an all-time high above $97,850, inches away from the $100K mark

Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.

More Bitcoin News
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.

More Shiba Inu News
Bitcoin: New high of $100K or correction to $78K?

Bitcoin: New high of $100K or correction to $78K?

Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP