BlackRock’s Spot Bitcoin ETF Fees: Analyst Reveals!

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• As the date for the decision on the Bitcoin spot ETF approaches, the crypto and broader financial community is speculating about the potential fees of BlackRock.
• Barry Ritholtz suggested that a competitive fee for BlackRock would be 0.35%. He considered Vanguard not being in this fee range.
• The broader context includes competition from other firms. Fidelity’s S-1 filing previously revealed a competitive fee structure of 0.39%.

As decision anticipation for spot Bitcoin ETFs continues, the community has begun discussing fee competition for ETFs.

Debates on Fees for Spot Bitcoin ETFs

As the date for the decision on the Bitcoin spot ETF approaches, the crypto and broader financial community is speculating about the potential fees of BlackRock. Following a post by Bloomberg’s senior analyst Eric Balchunas on X, the investor community is investigating the “biggest unknowns.”

Balchunas estimated a fee of 0.47% and invited others to share their predictions. Barry Ritholtz, CIO of Ritholtz Wealth Management, suggested a competitive fee for BlackRock would be 0.35%. He considered Vanguard not being in this fee range.

However, he noted that if BlackRock lowers the fee to 0.25%, it would dominate the market. Balchunas mentioned that BlackRock could demand a fee between 0.40% and 0.60% due to its intention to generate significant revenue. On a lighter note, a user named Maximilian humorously speculated about a fee of 0.42069%, but Balchunas mentioned that BlackRock usually doesn’t humorously adhere to such fee structures.

The broader context includes competition from other firms. Fidelity’s S-1 filing previously revealed a competitive fee structure of 0.39%. The entrance of Invesco Galaxy is noteworthy, adopting an approach of not charging fees for the first six months and the first $5 billion in assets.

BlackRock’s Dominance

FT emphasizes the decreased dominance of BlackRock in the U.S. exchange-traded fund (ETF) market. Referring to data from Morningstar Direct, the newspaper recently noted fierce competition for BlackRock from Vanguard and smaller players in the space. As of November, it is reported that BlackRock’s iShares managed approximately 32% of the U.S. ETF market, a significant decrease from the 33.7% at the end of 2022 and 39% at the end of 2018.

While BlackRock’s iShares aims to appeal to a broad market, Vanguard focuses on equities and bonds using its reputation for low-cost, broad-based strategies. As Bryan Armour, the director of passive research at Morningstar, mentioned, this strategic difference could be a significant factor in the evolving ETF market where Bitcoin could be one of the players.

Meanwhile, Democratic Party member Bernie Sanders highlighted the potential risk for democracy posed by powerful firms like BlackRock. The U.S. politician emphasized in a post on X that BlackRock, along with Vanguard and State Street, manages a total of $20.7 trillion in assets. He also pointed out that they are significant shareholders in 95% of the companies that make up the S&P 500 index.