January 26, 2024

Europe Joins Bitcoin ETF Fee Battle as Invesco and WisdomTree Slash Fees by Over 60%

Invesco and WisdomTree reduce fees on European-listed bitcoin ETPs by more than 60%.

In a strategic move to enter the spot bitcoin ETF market, European financial giants Invesco and WisdomTree are aggressively cutting fees on their European-listed ETPs, mirroring the recent fee war seen in the U.S. where a wave of spot bitcoin ETFs gained regulatory approval from the U.S. Securities and Exchange Commission.

Responding dynamically to the surge of new crypto products in the U.S., Invesco and WisdomTree have significantly reduced fees by more than 60% on their European physical bitcoin offerings. This decisive action signals Europe's intent to actively participate in the evolving cryptocurrency landscape, rather than being a passive observer.

The U.S. market has witnessed an influx of new products, leading to a fee reduction trend aimed at attracting more investors. Notable examples include Ark Investment Management offering a fee-free period for the first six months or until reaching $1 billion in assets and BlackRock introducing a competitive 0.25% fee, with an early-bird discount at 0.12%.

However, the enthusiasm in the U.S. has had repercussions for Europe, as outflows from European bitcoin exchange-traded products (ETPs) have surged in the wake of the recent launch of spot BTC ETFs in the United States.

Despite this challenge, Invesco and WisdomTree are not idly standing by. Invesco has slashed fees from 0.99% to 0.39% on its Invesco Physical Bitcoin ETP, while WisdomTree has reduced fees on its WisdomTree Physical Bitcoin ETP from 0.95% to 0.35%. This fee-cutting battle underscores Europe's determination to actively engage in the competitive crypto market.

It's essential to note that Europe has been involved in the crypto space for some time, employing its own set of rules and strategies. The region introduced regulated spot bitcoin ETPs in 2015, with the launch of Bitcoin Tracker One by Swedish vendor XBT AB. In 2023, the Jacobi FT Wilshire Bitcoin ETF made its debut on Euronext Amsterdam, aligning with the EU's emphasis on sustainable blockchain innovation.

Europe's approach to cryptocurrency differs from the U.S., leaning towards a more thoughtful and strategic investment culture. While the U.S. embraces bitcoin ETFs boldly, Europe has maintained a cooler stance, favoring ETPs, which are more familiar in its investment landscape.

In Europe virtually all digital assets exchange-traded products are structured as exchange-traded notes, rather than funds. Investors in ETNs own a debt security, while ETF shareholders owns a portion of a fund’s underlying assets.

VanEck's Martijn Rozemuller suggests that the recent U.S. SEC decision could influence Europe's crypto scene, potentially sparking increased interest. However, Europe faces unique challenges such as liquidity and tax considerations across its various exchanges, as highlighted by 7IM's Peter Sleep.

Despite these challenges, Europe's entry into the bitcoin arena goes beyond catching up with the U.S.; it aims to carve its own niche in the global cryptocurrency market, blending innovation with a measured and strategic approach. While Europe may not replicate the U.S.'s success with spot bitcoin ETFs, it is undoubtedly shaping its own narrative as the crypto landscape continues to evolve.

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