Cathie Wood's ARK Investment Management and digital-asset firm 21Shares just became the first major applicant in the U.S. spot bitcoin ETF race to list a fee on their planned offering.
The Ark 21Shares Bitcoin ETF would carry a management fee of 80 basis points, according to an updated filing Nov. 20. That means if someone invests $100, they would be charged 80 cents. The application for the ETF, which will trade under the ticker ARKB, had previously listed 70 basis points in a placeholder capacity.
With the amendment, Ark and 21Shares have fired the opening volley in what industry experts predict will be an instantaneous race-to-the-bottom on fees. Asset-management titans including BlackRock, Invesco and Fidelity Investments, known for their low-cost lineups, have also filed for ETFs that would directly invest in the cryptocurrency — a structure that U.S. regulators have yet to approve — but none have included management fees in their applications.
"If I'm being honest, I thought they'd be a little lower than this, closer to 50 basis points," said Bloomberg Intelligence ETF analyst James Seyffart. "Also the fact that Ark and 21Shares have updated their filing from a 70 basis point fee to 80 basis points might mean that running these products is going to cost even more than some sponsors and issuers thought it would."
Still, 80 basis points undercuts the 95 basis point fee charged by the $1.4 billion ProShares Bitcoin Strategy ETF (ticker BITO), the largest bitcoin futures-based fund. And it's well below that of the $23 billion Grayscale Bitcoin Trust (GBTC), which charges 2%.
The updated filing from Ark and 21Shares is another step on a rocky road to a much awaited decision from the Securities and Exchange Commission on whether such products will launch in the U.S. The regulator again deferred on two more filings last week, following a wave of recent delays.