Reportedly, the creators of two proposed Bitcoin exchange-traded funds (ETFs) have established the fees they will impose if their ETFs receive approval. According to information from Fortune, Fidelity Investments plans to charge holders of its Wise Origin Bitcoin Trust 0.39% annually, while Galaxy/Invesco is set to charge 0.59% per year for its BTCO fund.
Notably, Galaxy/Invesco intends to waive the fee for the first six months of the fund’s operation. The details were sourced from a court filing on December 29, as mentioned in the report. Additionally, the report reveals that Jane Street Capital will act as the “authorized participant” for the Bitcoin ETFs of Fidelity, WisdomTree, and Valkyrie, implying its role in arbitraging price differences between these funds’ shares and Bitcoin itself. Valkyrie has also designated Cantor Fitzgerald as a second authorized participant, while Galaxy/Invesco and BlackRock have enlisted JPMorgan and Virtu as their authorized participants.
The ETFs are adopting a “cash” model for creation and redemption, meaning that authorized participants will not directly purchase Bitcoin to deposit into the funds. Instead, they will deposit the cash equivalent corresponding to the amount of Bitcoin they wish to contribute, and this cash will be utilized by the fund to acquire BTC. The report notes that the United States Securities and Exchange Commission (SEC) has advocated for this approach, expressing reluctance to allow broker-dealers to handle Bitcoin directly.
The anticipation among Bitcoin holders for the approval of a spot ETF in the United States has persisted for years, with the belief that it could attract new investors and contribute to a further increase in Bitcoin’s price. While the SEC has previously rejected multiple Bitcoin ETF proposals, there seemed to be a shift in August when Grayscale won a lawsuit against the agency. In that ruling, a U.S. Court of Appeals determined that the SEC had arbitrarily denied Grayscale’s application for a spot Bitcoin ETF and instructed the agency to reconsider its decision.
Since then, various new applications and revisions for Bitcoin ETFs have been submitted, including proposals from Fidelity, WisdomTree, Invesco Galaxy, and Bitwise. As of now, the SEC has not officially announced the approval of any spot Bitcoin ETF.
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