VanEck has announced the removal of all spot Bitcoin exchange-traded fund trading fees until March 31, 2025.
VanEcks’s spot Bitcoin ETF, HODL, has attracted a little over $305 million in assets, significantly lower than most of its competitors.
VanEck Removes Trading Fees
According to VanEck’s announcement, investors can invest in VanEck’s Bitcoin Trust (HODL) without incurring any fee until March 31, 2025. VanEck posted the announcement on its official handle on social media platform X, stating,
“Because we believe in Bitcoin so much, starting tomorrow, you can invest in VanEck Bitcoin Trust (HODL) with no fees until March 31, 2025.”
VanEck previously charged a fee of 0.2%, which was also considerably less than that of its competitors. For example, VanEck’s competitors, including BlackRock, Invesco, Fidelity, WisdomTree, and Valkyrie, charge a 0.25% fee, while Franklin Templeton charges a lower fee of 0.19%.
Fine Print
VanEck also highlighted the fine print regarding the fee removal, with the asset manager stating that it would drop the fee until March 31, 2025, unless the fund reaches $1.5 billion in assets before the date.
“During the period commencing on March 12, 2024, and ending on March 31, 2025, the Sponsor will waive the entire Sponsor Fee for the first $1.5 billion of the Trust’s assets. If the Trust’s assets exceed $1.5 billion prior to March 31, 2025, the Sponsor Fee charged on assets over $1.5 billion will be 0.20%. All investors will incur the same Sponsor Fee, which is the weighted average of those fee rates. After March 31, 2025, the Sponsor Fee will be 0.20%.”
Reason Behind Fee Drop
VanEck has claimed that the fee drop is a result of its belief in Bitcoin. However, a closer look may indicate that the fund’s slow start compared to its competitors could have also played a role in the fee waiver. Currently, VanEck’s HODL manages just over $305 million in assets under management. Meanwhile, other funds have long crossed the $1 billion mark.
BlackRock’s iShares Bitcoin Fund (IBIT) currently has $13 billion in assets under management, the most among all approved ETFs, excluding Grayscale’s Bitcoin Trust (GBTC), which already had $30 billion in assets under management when it joined the ETF race. Shares in VanEck’s HODL Bitcoin ETF are physically backed by Bitcoin and held in cold storage by a qualified custodian. Currently, the ETF holds 297,864,414 net BTC.
Meanwhile, Bitcoin has been on the ascendency since the approval of spot Bitcoin ETFs in January 2024. On Monday, it surpassed the Swiss Franc to become the third-largest currency in the world.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
