After months of speculation, the Spot Bitcoin ETFs have been finally approved by the SEC.
Eleven Spot ETFs have surfaced from known and reputable issuers like Bitwise, ARK, Blackrock, Fidelity, and more. Leading to this cornerstone decision, BTC was up over 6% week-on-week.
Trading.biz analyst Rahul Nambiampurath mentions that while the BTC price surge is more on the expected lines, ETH’s weekly surge of 15.3%, as of January 11, 2024, makes the trading world more optimistic about the upcoming ETH spot ETFs from players like Grayscale, VenEck, and Hashdex.
Fee wars and the impact on BTC adoption
Unlike the spot counter of BTC, the spot ETFs have several elements linked to them. The most crucial ones include fee wars among issuers and arbitrage challenges, courtesy of the differences between the spot and Futures prices.
Spot BTC ETF issuers are asking for anywhere between 0.21% to 1.5%. The difference in the fee structure could bring in more options for the investors, with the lower slabs making spot BTC exposure more accessible to the public. Months before the equally-anticipated halving event, this move can serve as a price-specific boost.
Here is a list of spot BTC ETF issuers, along with the proposed fee slabs:
- Ark 21Shares Bitcoin ETF (ARKB): 0.21%
- Bitwise Bitcoin ETF (BITB): 0.24%
- iShares Bitcoin Trust (IBIT): 0.25%
- VanEck Bitcoin Trust (HODL): 0.25%
- Grayscale Bitcoin Trust (GBTC): 1.50%
“ETF issuers charging a premium, in terms of fees, need to provide improved fund management strategies, efficient market accessibility, and unique investment strategies to stay relevant,” mentions Rahul.
Regardless of the fee slabs, the spot ETFs will increase market participation, improve liquidity by bringing more funds into the space, and increase market depth as more of the issuers enter the BTC buying space.
How could other Bitcoin ETFs be impacted?
Spot BTC ETFs are new, but they aren’t the only Bitcoin-specific ETFs. Some of the more established ones include the following:
- ProShares Bitcoin Strategy ETF (BITO)
- Valkyrie Bitcoin Strategy ETF (BTF)
- VanEck Bitcoin Strategy ETF (XBTF)
- Valkyrie Bitcoin Miners ETF (WGMI)
- Global X Blockchain & Bitcoin Strategy ETF (BITS)
- Amplify Transformational Data Sharing ETF (BLOK)
While these ETFs focus on different Bitcoin-led spaces, they might still be relevant post-the-spot ETF approval. For instance, despite the nearly-confirmed news regarding spot ETF approval, BITO was up 10.88% year-to-date. Over the last three months, BITO surged by 64.97%, while BTC, the primary asset, surged close to 70%.
The price action suggests a surge in 24-day trading volume, showing a renewed interest in the product. The only concern could be the RSI, which shows a drop in momentum. A rise above the last RSI high could again trigger increased adoption.
And while the spot ETF players might give some competition to the upcoming price action of BITO, Futures ETF might still be attractive to the more risk-averse folks preferring regular investment products.
