VanEck’s Zero-Fee Bitcoin Spot ETF Amid Record Inflows

VanEck, an asset management company, recently announced that it will waive all sponsor fees for its Bitcoin Trust ETF until March 31, 2025 for the first $1.5 billion of funds. The sponsor fee is typically set at 0.20% of net assets under management for funds that exceed $1.5 billion. This move reflects VanEck’s strong belief in the potential of Bitcoin and aims to attract more investors to its Bitcoin Trust. The decision comes after the approval of the VanEck Bitcoin Trust ETF by the U.S. Securities and Exchange Commission (SEC) on January 4.

Currently, the VanEck Bitcoin Trust ETF has $297.86 million in assets under management and holds 4,299 Bitcoin. Since its inception two months ago, the ETF has achieved a return of 87.7% by tracking the performance of Bitcoin. This success has sparked competition among other ETF managers, leading to a price war over management expenses. Previously, the Grayscale Bitcoin Trust had an annual management fee of 2%, but that has now dropped and the industry average stands at below 0.30%.

The growth of Bitcoin ETFs in the U.S. market has been impressive. Eric Balchunas, a senior ETF analyst for Bloomberg, noted that the ten spot Bitcoin ETFs listed in the U.S. have accumulated a combined $55 billion in assets under management and witnessed a total trading volume of $110 billion. This level of success is unprecedented, especially considering that it has been achieved within just eight weeks. While Bitcoin ETFs have surpassed S&P 500 Industrial ETFs in size, they are still behind S&P 500 Low Volatility sector ETFs and gold ETFs in terms of assets under management.

As of now, Bitcoin is trading at a record high price of $72,721. This adds to the confidence investors have in the cryptocurrency and further fuels the interest in Bitcoin ETFs. With the elimination of sponsor fees for the VanEck Bitcoin Trust ETF, investors will have the opportunity to capitalize on the potential of Bitcoin without incurring any additional costs. VanEck’s decision to offer fee-free investing underscores their commitment to Bitcoin and their belief in its long-term value.

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