Fidelity and Galaxy/Invesco Reveal Bitcoin ETF Fees in Case of Approval

Reports have surfaced unveiling the fee structures for proposed Bitcoin exchange-traded funds (ETFs), shedding light on the strategies and key players vying for approval.

According to Fortune, Fidelity Investments and Galaxy/Invesco have outlined their respective fee models, offering a glimpse into their anticipated operations.

Fidelity Investments is set to charge 0.39% annually for its Wise Origin Bitcoin Trust, while Galaxy/Invesco plans to implement a 0.59% annual fee for its BTCO fund. However, Galaxy/Invesco intends to waive this fee for the initial six months of the fund's operation, as disclosed in a court filing, cited as the primary source of this information.

Beyond fee structures, the report detailed the involvement of key entities in the ETF ecosystem. In fact, Jane Street Capital has been identified as the "authorized participant" for Fidelity, WisdomTree, and Valkyrie's Bitcoin ETFs, signaling its role in arbitraging potential price differences between these funds' shares and the underlying Bitcoin asset.

Additionally, Valkyrie has designated Cantor Fitzgerald as a secondary authorized participant, while Galaxy/Invesco and BlackRock have enlisted JPMorgan and Virtu as their authorized participants.

Crucially, these ETFs are poised to adopt a "cash" model for creation and redemption, circumventing direct Bitcoin handling by authorized participants. Instead, participants will deposit cash equivalent to the desired Bitcoin amount, enabling the fund to subsequently purchase BTC.

This approach has been advocated by the U.S. Securities and Exchange Commission (SEC), aiming to distance broker-dealers from direct Bitcoin transactions, as highlighted in the report.

It is worth noting that the anticipation surrounding Bitcoin ETF approval in the United States has been longstanding, with proponents viewing it as a gateway for introducing new investors to Bitcoin and potentially propelling its value.

The SEC has yet to issue an official announcement regarding the approval of any spot Bitcoin ETF, leaving the crypto community and investors eagerly awaiting a decision that could redefine the landscape for Bitcoin investment opportunities in the United States.