The Bitcoin spot exchange-traded fund (ETF) war has reached Europe just weeks after asset managers received approval from the US Securities and Exchange Commission (SEC) to list their respective ETFs on the stock market.
Before the Jan. 10 approval, all 11 applicants updated their Form S-1s several times to reduce ETF fees. Currently, a similar trend is observed among European exchange-traded products (ETPs).
Two leading asset managers, Invesco and WisdomTree, have reduced fees on their European-listed ETPs by more than 60%. The fee for Invesco's $137 million physical Bitcoin ETP will be reduced from 0.99 percent to 0.39 percent, and the fee for WisdomTree's $325 million physical Bitcoin ETP will be reduced from 0.95 percent to 0.35 percent.
In Europe, exchange-traded digital asset products are structured as exchange-traded notes (ETNs) rather than funds. ETN investors own the debt backing, while ETF shareholders own a portion of the fund's underlying assets.
The reason for the significant reduction in fees is due to increased competition and the presence of several ETFs in the US, one of the leading financial markets. Previously, US investors had to seek investments in Canadian and European ETPs, but with the approval of 11 ETFs in the US, demand for European ETPs from US investors has decreased significantly.
Related: SEC did not 'endorse or disapprove of Bitcoin' with approval of BTC spot ETF – Gary Gensler
In an interview with the Financial Times, Gary Buxton, Invesco's head of ETFs in Europe, said that “several” US ETFs had reduced their fees to find a “new equilibrium between supply and demand”, resulting in significantly lower prices than existing US ETPs . Europe.
Compared to European ETPs, US-based Bitcoin ETFs are more liquid and available on a single exchange platform, making them more accessible to European investors. The recently launched US spot Bitcoin ETFs attracted billions in trading volume from day one, and even two weeks later, these ETFs continue to trade billions in daily volume.