Various ETF providers are lowering the management fees for their spot Bitcoin ETFs, as a competitive battle ensues ahead of the anticipated approvals this week.
Reduced Fees for Spot Bitcoin ETFs
Invesco has decreased the proposed fee for its ETF from 0.59% to 0.39% annually, according to an SEC filing. Valkyrie has also reduced its fee from 0.8% to 0.49%. WisdomTree has taken a more aggressive approach, dropping its fee to 0.2% and waiving fees entirely for the first $1 billion in assets under management (AUM). This move by WisdomTree is likely a marketing strategy to cultivate FOMO (fear of missing out) surrounding its ETF launch.
FOMO Tactics for Spot Bitcoin ETFs
Other ETF providers are employing similar tactics to attract investors to their proposed spot Bitcoin ETFs. Bitwise, ARK/21Shares, Invesco, and iShares (BlackRock) are all proposing either zero or lower fees for the early months of AUM.
Anticipation of Spot Bitcoin ETF Approvals
Market participants and analysts are speculating that spot Bitcoin ETFs could be approved as early as Thursday. VanEck’s CEO has recently expressed this viewpoint on CNBC. The excitement surrounding this potential approval has contributed to a rapid build-up of FOMO in the Bitcoin market.
Rise in Bitcoin Price
On Monday, BTC surged over 7% to cross $47,000 for the first time since April 2022. This one-day performance was the best since October. The approval of spot Bitcoin ETFs has the potential to attract substantial long-term institutional investments into BTC. Standard Chartered has projected a BTC price of $200,000 by 2025, citing an inflow range of $50-100 billion.
Bidding War and Inflow Volume
The competition among potential spot Bitcoin ETF providers has intensified, adding to the excitement. Bitcoin traders will closely monitor the volume of inflows that these new products attract on launch day, assuming they receive the green light from the SEC.
Potential Market Reactions
Some analysts have flagged the possibility of a “sell-the-fact” reaction to the approval of spot Bitcoin ETFs. This refers to the tendency of investors to take profit following the confirmation of positive news. However, chart analysis suggests that the bulls currently have the upper hand, with momentum favoring further gains. Spot Bitcoin ETF approvals could act as catalysts for a near-term price surge, particularly if the demand exceeds expectations at launch.
Long-Term Outlook
The bullish outlook for Bitcoin remains intact, as spot Bitcoin ETF approvals in the US are expected to introduce new structural demand for BTC. Additionally, if the Federal Reserve cuts interest rates in 2024, macroeconomic conditions should provide further support. The upcoming Bitcoin halving in April has historically been a bullish event, as it reduces sell pressure from miners. All-time highs for the BTC price in 2024 are within reach.
