Global asset manager VanEck will temporarily slash the management fees for its spot bitcoin exchange-traded fund (ETF) to zero, as its competitors see massive demand for their funds.
In a Monday announcement, VanEck said that from March 12 until March 31, 2025, investors would be able to invest in its VanEck Bitcoin Trust (HODL) without being subject to fees. If the fund’s assets under management (AUM) crosses $1.5 billion, then VanEck would charge a sponsor fee of 0.20%, which was the fee it had originally charged investors.
IMPORTANT UPDATE!
Because we believe in #bitcoin so much, starting tomorrow, you can invest in VanEck Bitcoin Trust (HODL) with no fees until March 31st, 2025.*
*During the period commencing on March 12, 2024, and ending on March 31, 2025, the Sponsor will waive the entire…
— VanEck (@vaneck_us) March 11, 2024
The fee change announcement led to a massive increase in inflows into the fund on Monday, with Bloomberg ETF analyst Eric Balchunas pointing out Tuesday morning that the fund “shattered” its personal flow record with $119 million in inflows yesterday.
VanEck announced it is waiving fee for next 12mo for $HOLD and immediately shatters its personal flow record w $119m which added to the Nine's $1b in flow yest (i think record) which was more than enough to outdo GBTC's $494m in outflows. Assets in the ten a hair away from $60b. pic.twitter.com/55tNol99r2
— Eric Balchunas (@EricBalchunas) March 12, 2024
Although VanEck cited its belief in bitcoin as the reason behind its revised fee structure, it is likely that the move is aimed at capturing more market share and growing its AUM. As of March 11, HODL had just under $320 million in AUM, while BlackRock’s iShares Bitcoin Fund (IBIT) just surpassed MicroStrategy’s bitcoin holdings with over $13.5 billion in AUM.
Other ETF issuers with similar fee structures, including Fidelity, Ark Invest and Bitwise, have also crossed the $1 billion mark in AUM. Meanwhile, Grayscale Investments is the only ETF issuer that continues to see outflows, with its fees significantly higher at 1.5%, but AUM now down to $28.5 billion.
Spot bitcoin ETFs have had a record run since they were launched two months ago, with the ten newly launched funds (outside of GBTC, which converted from a close-ended fund into an ETF) now holding over $55 billion in AUM.
First two months officially in the books (it's felt like six) and the ten bitcoin ETFs now have over $55b in assets with exactly double that in volume at $110b. If these were the numbers at the end of year I'd call them a success. To do it in eight weeks is simply absurd. pic.twitter.com/8YvzQZdYyJ
— Eric Balchunas (@EricBalchunas) March 11, 2024
Much of the recent price action for bitcoin has been attributed to the booming new market for spot bitcoin ETFs in the U.S. Earlier, bitcoin rallied to a new all-time high of $72,850, following news from the U.K.’s Financial Conduct Authority that it would not object to institutional investors building crypto-backed exchange-traded notes (ETNs).
UPDATE (March 12, 10:55 a.m.): Added flows information from Tuesday tweet by Eric Balchunas.
