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A Look at the Management Fees of 11 Bitcoin Spot ETFs, Expected to Raise $4 Billion in Funding on the First Day

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A Look at the Management Fees of 11 Bitcoin Spot ETFs, Expected to Raise $4 Billion in Funding on the First Day

According to analysis by Bloomberg ETF analyst Eric Balchunas, the trading debut of 11 approved physically-backed Bitcoin ETFs could potentially inject $2 billion on their first day, breaking records for first-day flows. With seed money and grassroots interest, it is expected to raise up to $4 billion on the first day and reach $500 billion in assets under management within two years.

Background: SEC officially approves Bitcoin physically-backed ETFs, but Bitcoin prices are currently underperforming Ethereum.

Bloomberg Estimates $4 Billion on First Day, $500 Billion in Assets Within Two Years

The U.S. Securities and Exchange Commission (SEC) officially approved the issuance of 11 Bitcoin spot ETFs this morning, and various exchanges announced that trading will officially start on 1/11. ETF analyst Eric Balchunas from Bloomberg analyzed that the first day of trading for the U.S. Bitcoin spot ETFs may see an injection of $2 billion, breaking the record for first-day trading volume. The combination of seed funding and grassroots interest is expected to power the 11 ETFs, with Balchunas estimating that these ETFs could raise as much as $4 billion on the first day and reach an asset size of $500 billion within two years.

Seed Funding Continues to Flow In

Earlier reports indicated that BlackRock had raised $2 billion from existing Bitcoin holders, but the S-1 form submitted by BlackRock to the SEC only listed $10 million in seed funding.

According to The Block's report, VanEck has injected $72.5 million into its potential ETF. Bitwise has also injected $500,000 into its ETF, and Pantera Capital has expressed interest in injecting $200 million into Bitwise's fund. However, this statement comes with a disclaimer stating that it is merely an expression of interest and not legally binding.

Meanwhile, Grayscale's GBTC currently has assets totaling $28.5 billion. With this in mind, reaching $500 billion in assets for the Bitcoin spot ETF within two years does not seem too difficult.

Overview of 11 ETF Management Fees

Yesterday, BlackRock, Ark Invest, and Fidelity once again lowered their management fees, with up to 6 issuers offering significant initial fee waivers. BlackRock also proposed a 0.12% discount for the first 12 months or first $5 billion, which will then revert to 0.25%, all significantly lower than Grayscale's GBTC at 1.5%.