Bitwise spot bitcoin ETF wins day-one inflow race as fee war continues

The Bitwise Bitcoin ETF, the lowest-cost entrant out of the starting gate, won the first day net inflow race among spot bitcoin ETFs, according to Bloomberg Intelligence Senior ETF Analyst Eric Balchunas.

In a Jan. 12 post on X, formerly Twitter, Balchunas said the Bitwise ETF, known by the ticker BITB, was the winner in "Day One of the Cointucky Derby" with some $238 million of inflows. The Fidelity Wise Origin Bitcoin Fund was a "close second" with $227 million of inflows, followed by BlackRock's iShares Bitcoin Trust, which came in a "distant third" with nearly $112 million, according to the post.

The three were among the field of 10 spot bitcoin ETFs that began trading on Jan. 11 after the Securities and Exchange Commission on Jan. 10 approved 19b-4 applications for 11 spot bitcoin ETFs.

In a news release early on Jan. 11, Bitwise Asset Management said the management fee on its spot bitcoin ETF was the lowest among the current spot bitcoin ETFs at 0.20% with the fee set to 0% for the first six months on the first $1 billion of assets.

"BITB combines extremely low fees—just 0.20% per year—with Bitwise's deep crypto expertise," Bitwise Asset Management Chief Investment Officer Matt Hougan said in comments provided through a spokesperson Jan. 12. "That seems to be resonating in the market."

However, even after the spot bitcoin ETFs had launched, the fee war seen in the lead up to post time continued. In a Jan. 12 email, a Franklin Templeton spokesperson said the firm had lowered the fee on the Franklin Bitcoin ETF.

"We're excited and encouraged by the strong investor interest we're seeing for spot bitcoin ETFs," said David Mann, head of ETF product and capital markets at Franklin Templeton, in comments included in the spokesperson's email.

To demonstrate Franklin's "commitment to the product and future of digital assets" it has decided to waive fees until Aug. 2 on the first $10 billion in assets under management, Mann said.

"After that, we'll offer EZBC at the extremely competitive price of 19 basis points," he said, referring to the fund by its ticker symbol. "We think this sends a clear signal to investors: we're here for the long run."

Franklin's spot bitcoin ETF had day-one net inflows of slightly more than $50 million, according to Balchunas' post, ranking it in fifth place behind fourth-place finisher ARK 21Shares Bitcoin ETF, which took in just over $65 million.

"Everyone's looking for an edge …," Balchunas said in an interview.

While the Bitwise ETF had been the lowest-cost offering, Franklin can now say its product is the cheapest, he said.

"So, it's about being able to have something in your tool belt marketing-wise to be able to go to advisers with," Balchunas said. "So, Franklin can now … at least for a little while say we're the cheapest."