Invesco and WisdomTree have drastically reduced their European Bitcoin exchange-traded product (ETP) fees. This move directly responds to the introduction of Spot Bitcoin Exchange-Traded Funds (ETFs) in the United States, intensifying competition in the crypto market.
Invesco, WisdomTree cut fees in Bitcoin ETF battle
The decision by Invesco and WisdomTree to slash their fees signifies a strategic adaptation to the evolving market dynamics. Invesco has announced a significant cut in the Total Expense Ratio (TER) for its Invesco Physical Bitcoin ETP (BTIC), reducing it from 0.99% to 0.39%. This adjustment aligns BTIC with Europe’s most economical Bitcoin ETPs, specifically the 21Shares Bitcoin Core ETP.
Following Invesco’s lead, WisdomTree has also reduced the TER of its WisdomTree Physical Bitcoin ETP (BTCW) from 0.95% to 0.35%. Although this marks a substantial reduction, BTCW’s fee remains slightly higher than its American counterparts. These strategic price adjustments by both companies clearly indicate the growing competition in the European cryptocurrency investment market.
Launching Spot Bitcoin ETFs in the United States has influenced European investment strategies. Gary Buxton, Invesco’s Head of ETFs for Europe, the Middle East, Africa, and Asia Pacific, acknowledged the significant shift caused by the American market. He noted that the range of prices for tracking products in Europe is now considerably lower than before.
Similarly, Alexis Marinof, Head of WisdomTree Europe, highlighted that the U.S. development has garnered considerable attention from European investors. The entry of U.S.-based ETFs with lower fees has undeniably challenged European firms to recalibrate their strategies to remain competitive.
Strategic response to market evolution
The move by Invesco and WisdomTree to cut fees on their Bitcoin ETPs is a proactive measure to offer more attractive investment options. This fee war marks a pivotal moment in the evolution of the cryptocurrency market, signaling an era where investors stand to benefit from reduced costs and increased product choices.
Invesco, in particular, has taken an aggressive approach in the U.S. by waiving fees for the first six months or until reaching $5 billion in investments, after which it will charge a 0.39% fee. This strategy aims to attract a significant initial investment pool and sets a new precedent in fee structures within the industry.