Spot Bitcoin Applicants Put Fees Near 0.25% as SEC Deadline Nears

Several investment managers filed amended prospectuses for proposed U.S. spot-bitcoin exchange-traded products on January 8, 2024, disclosing fees near one-quarter of a percentage point while the Securities and Exchange Commission’s decision on the first pending exchange proposal remained unresolved.

The filings moved the competition beyond the question of whether regulators would permit the products. Bitwise, ARK 21Shares and VanEck were also positioning themselves for an institutional contest over price, distribution, liquidity and assets—provided the necessary regulatory approvals arrived.

The fee contest becomes visible

Bitwise’s January 8 amendment set an annual sponsor fee of 0.24% of the Bitwise Bitcoin ETF’s bitcoin holdings. It also offered to waive that fee for six months on the first $1 billion of trust assets beginning when shares were initially listed. The filing identified the proposed NYSE Arca ticker as BITB and said the trust would hold bitcoin while calculating net asset value using the CME CF Bitcoin Reference Rate—New York Variant.

ARK 21Shares proposed a 0.25% annualized sponsor fee. Its waiver was structured differently: the entire fee would be waived until the earlier of six months after initial listing or the trust reaching $1 billion in assets. That distinction matters because superficially similar promotions could produce different costs depending on how quickly a product accumulated assets.

VanEck’s January 8 amendment likewise specified a unified sponsor fee of 0.25%, calculated by reference to the trust’s daily net asset value and payable monthly in arrears in bitcoin. The reviewed filing did not attach the same defined introductory waiver described by Bitwise and ARK 21Shares.

These percentages were proposed recurring sponsor or management fees, not complete measures of ownership cost. Brokerage charges, bid-ask spreads, premiums or discounts to net asset value, creation and redemption expenses, taxes and extraordinary trust expenses could affect investors or the products separately. The fee bases and waiver mechanics also were not identical across filings.

Two regulatory tracks still mattered

The January 8 prospectus amendments did not authorize trading. A proposed product needed its securities registration statement to become effective, while its listing exchange separately needed SEC approval for the applicable rule change.

That second track was especially important for ARK 21Shares. On January 8, the SEC published notice of Cboe BZX’s Amendment No. 5 to the proposed listing rule. Cboe had submitted the amendment on January 5, replacing the preceding proposal in full. The SEC record identified January 10, 2024 as the date by which the Commission was scheduled to approve or disapprove the rule change.

The distinction prevents a common chronological error: detailed fees and operational language were evidence that applicants were preparing for a possible launch, but they were not evidence that the SEC had approved the products on January 8. The preliminary prospectuses remained subject to completion, and their terms could still change.

Why the filings mattered

Contemporaneous Reuters reporting described the disclosures as a fee war among traditional asset managers and crypto-focused firms. That characterization was supported by the narrow spread among the three directly reviewed proposals: 0.24% for Bitwise and 0.25% for both ARK 21Shares and VanEck before accounting for waivers.

For bitcoin’s institutional market, the significance was structural rather than merely promotional. Low published fees suggested that applicants expected scale and viewed spot-bitcoin exposure as a product capable of competing inside mainstream brokerage and portfolio infrastructure. Cash-based creation and redemption arrangements, custodians, benchmark selection and authorized participants would still shape how efficiently any approved product tracked bitcoin.

As of January 8, however, no launch, inflow, trading volume or investor adoption could be measured. The defensible conclusion was limited: issuers had made their commercial terms concrete while the decisive regulatory steps remained outstanding.