Industry Updates

CoinShares follows Invesco and WisdomTree in cutting bitcoin ETP fee

Physical bitcoin ETP fee war intensifies

Lauren Gibbons

a close-up of a silver coin

CoinShares has cut the fee of its physically-backed bitcoin exchange-traded product (ETP) in response to heightened market competition following approvals of spot bitcoin ETFs in the US.

The issuer reduced the fee on the CoinShares Physical Bitcoin (BITC) – coming into effect on 1 February – from 0.98% to 0.35%.

The launch of cheaper spot bitcoin ETFs in the US has sparked a price war in Europe as issuers hope to capitalise on anticipated increased institutional demand.

WisdomTree and Invesco both reduced the fees on their physical bitcoin ETPs last week, cutting them to 0.35% and 0.39%, respectively.

CoinShares said the fee cut aimed to price the product more competitively within the digital asset investment sector.

Frank Spiteri, head of asset management at CoinShares, said: “This change mirrors CoinShares' progressive approach towards the institutionalisation of digital assets, aiming for broader democratisation through regulated products like our crypto ETPs.

“With this pricing structure, investing in a bitcoin crypto ETP through CoinShares becomes a more economical choice than purchasing bitcoin on many mainstream crypto platforms.”

The fee reduction places BITC closer to Europe’s cheapest physical bitcoin ETP – the 21Shares Bitcoin Core ETP (CBTC) – which has a total expense ratio (TER) of 0.21%.

Europe’s cheapest bitcoin ETP is the Valour Bitcoin Zero SEK (BTC0E) with a management fee of 0%, though this is synthetically replicated.

Crypto ETPs saw inflows of $2.3bn last year, up from $830m in 2022 – of which bitcoin made up 87% of new assets – boosted by investor sentiment surrounding a potential spot bitcoin ETF approval in the US.

The bitcoin price has tumbled since the ETF approvals by the Securities and Exchange Commission on 10 January.

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