Asset manager VanEck has made a bold move by reducing all sponsor fees to zero for the first $1.5 billion of funds in its Bitcoin Trust ETF until March 31, 2025. The announcement, made on March 11, states that the usual sponsor fee of 0.20% of net assets under management will be waived for funds that exceed $1.5 billion. In a show of confidence in Bitcoin, VanEck declared, “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 VanEck Bitcoin Trust ETF was approved by the U.S. Securities and Exchange Commission (SEC) on January 4 and currently manages $297.86 million in assets, holding 4,299 Bitcoin (BTC). Since its inception two months ago, the ETF has delivered a remarkable return of 87.7%, closely tracking the performance of Bitcoin.
Interestingly, even as the SEC was reviewing applications for spot Bitcoin ETFs, a price war had already begun among ETF managers regarding their funds’ management expenses. Prior to the entry of competitors, the Grayscale Bitcoin Trust charged an annual management fee of 2%. However, with the increased competition, the industry average has dropped below 0.30%.
On the same day, Eric Balchunas, a senior ETF analyst for Bloomberg, highlighted in his research that the ten spot Bitcoin ETFs listed in the U.S. have collectively amassed an all-time high of $55 billion in assets under management and a total trading volume of $110 billion. Balchunas expressed astonishment at these figures, stating, “If these were the numbers at the end of the year, I’d call them a success. To achieve this in just eight weeks is simply absurd.”
While the size of Bitcoin ETFs has surpassed those of S&P 500 Industrial ETFs, it still falls behind the assets under management of S&P 500 Low Volatility sector ETFs and is nowhere near the trillions of dollars managed in gold ETFs. At the time of publication, Bitcoin is trading at a record-high price of $72,721.
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