Fidelity, a leading digital asset management firm, has announced the reduction of fees on its Bitcoin Exchange-Traded Product (ETP) in Europe, aiming to attract the interest of institutional and retail investors.
According to the information provided by Senior Bloomberg ETF Analyst Eric Balchunas on February 14, Fidelity Bitcoin ETF joined the broader trend in the ETF space, reducing fees on its products tied to digital assets.
Lowered Fees for Fidelity Physical Bitcoin ETP (FBTC)
According to Balchunas, the Fidelity Physical Bitcoin ETP (FBTC) will now witness its total expense ratio (TER) slashed from 0.75% to 0.35%. Notably, TER represents the annual running costs of an ETF and is calculated by dividing the fund’s operating expenses by the average assets of the fund.
“Fidelity cut the fee on its spot bitcoin ETF in Europe from 75bps to 35bps (a serious fee cut by any standards, shows Fidelity playing long game, morphing into Terrordome warrior) as the US fee war spreads around world,” noted Balchunas.
Notably, FBTC was listed in Europe in February 2022 on Deutsche Börse Xetra and SIX Swiss Exchange, and seeks to offer investors a secure, convenient, and regulated way to invest in bitcoin. Christian Staub, Managing Director for Europe at Fidelity International, highlighted the increased interest among bitcoin investors globally, which seems to be triggered by the recent approval of the first Bitcoin ETFs in the U.S. He states:
“This not only reflects the growing acceptance of digital assets as a whole, but also the increasing maturity of the underlying ‘Distributed Ledger Technology’ (DLT). In recent months, we have had numerous conversations with clients who have rightly asked us for an effective way to benefit from this trend.”
Staub said that Fidelity is confident that “the new price of our Bitcoin ETP will improve the way we meet their renewed demand and offer an even greater number of institutional and professional investors access to this type of asset.”
Fidelity Bitcoin ETP: Fee War Spreads to Europe
Interestingly, the fee cuts come after other competitors of Fidelity’s offering in Europe, including Invesco, WisdomTree, and CoinShares, reduced commissions on their products. As reported by the Financial Times (FT), following the approval of the spot bitcoin ETFs in the United States on January 10, the fee war has now spread to Europe.
Gary Buxton, Invesco head of ETFs for Europe, the Middle East, Africa, and Asia Pacific, told FT that “multiple” firms have lowered their fees for Bitcoin products in Europe. The US market “worked to find the new equilibrium between supply and demand,” said Buxton.
Notably, ARK Invest had lowered the fees for its US spot BTC ETF to 0.8% and debuted its product with no fees for the first six months or until assets reached $1 billion. Meanwhile, investors in BlackRock’s iShares Bitcoin Trust (IBIT) pay 0.25% for its product.
Following the rate cuts in the US, WisdomTree and Invesco reduced the fees by over 60% on their Europe-listed Bitcoin ETPs.
WisdomTree Europe head Alexis Marinof told FT:
“The launch of spot bitcoin ETFs in the US is helping the crypto market to evolve as the asset class continues to stake a claim for a place in client portfolios.”
