Fidelity will charge 0.39% to shareholders of its spot Bitcoin ETF, whereas Galaxy/Invesco will waive fees for six months before charging 0.59% afterwards.
The issuers of two proposed Bitcoin exchange traded funds have reportedly set the fees they will charge if their ETFs are approved. According to a report from Fortune, Fidelity Investments will charge 0.39% per year to holders of its Wise Origin Bitcoin Trust and Galaxy/Invesco will charge 0.59% per year for its BTCO fund. In Galaxy/Invesco’s case, the fee will be waived for the first six months of the fund’s operation. The report cited a Dec. 29 court filing as the source of the information.
The report also said Jane Street Capital will be the “authorized participant” for the Bitcoin ETFs of Fidelity, WisdomTree, and Valkyrie, implying that Jane Street Capital will be allowed to arbitrage differences in price between these funds’ shares and Bitcoin itself. Valkyrie also named Cantor Fitzgerald as a second authorized participant. Galaxy/Invesco and BlackRock have named both JPMorgan and Virtu as their authorized participants.
The ETFs will use a “cash” model for creation and redemption, which means that authorized participants will not purchase Bitcoin and deposit it into the funds. Instead, they will deposit the cash equivalent for the amount of Bitcoin they want to deposit, which will then be used by the fund to purchase BTC. The US Securities and Exchange Commission (SEC) has pushed for this solution, claiming that it doesn’t want to allow broker-dealers to handle Bitcoin, the report stated.
