Asset manager VanEck has made an exciting announcement regarding its Bitcoin Trust ETF. In an effort to demonstrate their faith in Bitcoin, VanEck will eliminate all sponsor fees for the first $1.5 billion of funds until March 31, 2025. The sponsor fee, which is currently set at 0.20% of net assets under management for funds exceeding $1.5 billion, will be waived completely for investors in the VanEck Bitcoin Trust (HODL) during this period.
The VanEck Bitcoin Trust ETF was granted approval by the U.S. Securities and Exchange Commission (SEC) on January 4. Currently, it manages assets worth $297.86 million, holding 4,299 Bitcoin (BTC). Since its inception two months ago, the ETF has achieved an impressive return of 87.7%, closely tracking the performance of Bitcoin.
Interestingly, even before the SEC began reviewing spot Bitcoin ETF applications, there was already fierce competition among ETF managers regarding management expenses. Prior to competitors entering the market, the Grayscale Bitcoin Trust charged an annual management fee of 2%. However, with the entry of new players, the industry average has dropped significantly to below 0.30%.
On the same day as VanEck’s announcement, Eric Balchunas, a senior ETF analyst for Bloomberg, highlighted the remarkable achievements of the ten spot Bitcoin ETFs listed in the U.S. These ETFs have collectively accumulated an all-time high of $55 billion in assets under management and have seen a total trading volume of $110 billion. Balchunas expressed his astonishment at these figures, stating that if these were the results at the end of the year, he would consider them a success. Achieving these milestones within just eight weeks is nothing short of absurd, according to Balchunas.
While the size of Bitcoin ETFs has surpassed that of S&P 500 Industrial ETFs, it still falls behind the assets under management of S&P 500 Low Volatility sector ETFs and is nowhere near the trillions of dollars managed in gold ETFs. As of now, Bitcoin is trading at a record-high price of $72,721.
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