Bitcoin ETF Fee War, Invesco And Galaxy Asset Management Lower Ratio

Invesco competes with asset manager companies in offering Bitcoin Spot ETFs to clients. (Photo; Doc. Insight token)

JAKARTA - The Bitcoin Spot's ETF (Exchange Trade Fund) market is increasingly crowded with competition between leading companies offering Bitcoin-based investment products. Invesco and Galaxy Asset Management are two global investment companies, announcing a reduction in the cost ratio for their product, the Invesco Galaxy Bitcoin ETF (BTCO stock code). The information was announced on Monday, January 29, 2024.

The cost ratio is the percentage of managed assets used to pay operational and administrative costs. The lower the cost ratio, the more cost-effective for investors. Invesco Galaxy Bitcoin ETF now imposes a cost ratio of 0.25%, down from the previous 0.39%. In addition, this product also provides cost exemptions for the first six months or up to $5 billion (Rp 79.03 trillion) in assets.

This reduction in cost ratio also applies to Bitcoin-based Invesco products in Europe, which fell from 0.99% to 0.39%. This move is part of Invesco's strategy to compete with other major Bitcoin Spot ETF investment product issuers, such as BlackRock and Fidelity. Both companies already lowered their product costs before US regulators approved the Bitcoin Spot ETF earlier this year.

Spot's Bitcoin ETF product is considered an easier and safer way for investors to access Bitcoin, without having to buy and store Bitcoin directly.

Despite lowering the cost ratio, Invesco Galaxy Bitcoin ETF is still not the most cost-effective product in the market. Currently, the cheapest cost ratio is held by ETF Bitcoin Franklin Templeton (EZBC), which has a cost ratio of only 0.19%. In fact, this product also offers charge exemptions until August 2, 2024, or up to $10 billion (IDR 158.05 trillion) in assets.

There are only three spot ETF investment product publishers with lower cost ratios than Invesco, namely 21Shares, Bitwise, and Franklin Templeton. However, in terms of total assets, Invesco Galaxy Bitcoin ETF is still in fifth place, with a total of around $283 million (IDR 4.47 trillion). Meanwhile, BlackRock and Fidelity dominated the market by controlling 70% of Spot's total Bitcoin ETF funding, which reached around $4 billion (IDR 63.22 trillion).