The management fee for the VanEck Bitcoin ETF (VBTC) has been cut to 0.45 per cent per annum, offering greater cost efficiency for investors seeking bitcoin exposure on the ASX, VanEck said on Thursday.
VanEck’s chief executive highlighted that VBTC is Australia’s largest and fastest-growing bitcoin ETF with almost $250 million in assets – growth it has achieved by capitalising on strong momentum in the bitcoin market and growing local investor demand.
“The bitcoin market is now in blue-sky territory, and governments around the world, including in Australia, are working on developing regulatory environments for cryptocurrency that will provide greater protection to investors,” Arian Neiron said.
“Recent policy announcements from the US government indicate a number of positive/green signals, reinforcing potential further upside for this emerging asset class. In Australia, we’re seeing more advisers incorporate bitcoin exposures based on client demand, and the combination of cost efficiency, ASX availability and a research housing rating have driven the bulk of these flows to VBTC,” he added without referencing Betashares’ market entry.
VanEck’s VBTC was the first bitcoin ETF on the ASX, followed by Digital X’s offering. But this week, Betashares launched two new ETFs – the Betashares Bitcoin ETF (QBTC) and the first Ethereum ETF on the ASX, the Betashares Ethereum ETF (QETH), though Monochrome had already listed an Ethereum ETF on Cboe mid last year.
While all the funds are reaping the benefits of the recent cryptocurrency spotlight, it didn’t take them long to re-engage in a first-to-market debate, with VanEck on X alleging that Betashares’ bitcoin fund carries “counterparty risks”.
Responding to a comment inquiring into whether VanEck’s fee reduction is a response to Betashares’ QBTC and the fact that the fees for the two ETFs are now fairly equal, VanEck said: “The fee may indeed be the same but one fund has counterparty risks, while the other is the largest bitcoin ETF in the country, backed up by a global fund manager with unparalleled expertise managing digital assets since 2017.”
Back in July, VanEck similarly lowered its fees when the DigitalX Bitcoin ETF debuted on the ASX.
While it’s no secret that VanEck’s fee cuts often coincide with rival fund launches, this move isn’t just a VanEck trademark – Global X also dropped fees for its spot bitcoin ETF the same day VBTC debuted.
InvestorDaily previously covered the competition for Australia’s first bitcoin ETF, with each fund manager asserting their claim to the title for one reason or another.
Global X was first to enter the market back in 2022, when it listed both a bitcoin ETF and an Ethereum ETF on Cboe. Monochrome was next, listing a bitcoin ETF (IBTC) on Cboe in June, a few weeks before VanEck announced it was listing its product VBTC on the ASX.
DigitalX might’ve joined the party a little late, but that didn’t stop it from claiming the title of the “only ASX-listed locally domiciled ETF offering direct exposure to bitcoin”.
Australia now has five bitcoin ETFs, with slightly differing structures (often a point of contention), and three Ethereum ETFs.
Bitcoin ETFs dominate but Ethereum has room to grow
Earlier this month, data from asset managers revealed that the Australian ETF industry officially exceeded $250 billion in size at the end of January, supported by record inflows and positive market performance.
Several bitcoin ETFs made it onto the ladder top-performing products in the month of January, including the Monochrome Bitcoin ETF (IBTC), GlobalX 21Shares Bitcoin ETF (EBTC) and DigitalX Bitcoin ETF (BTXX), on the back of growing momentum.
With bitcoin ETF flows dominating headlines for much of 2024, Ethereum ETFs have been overshadowed, Marc Jocum, senior product and investment strategist at Global X, told InvestorDaily.
Locally, despite the growing range of Ethereum ETFs with currently three available, the total assets under management remain modest at around $40 million – a 13th of the size of the Australian bitcoin ETF market.
The Global X 21Shares Ethereum ETF (EETH), the first spot-Ethereum ETF in the Asia-Pacific region launched in 2022, continues to attract the lion’s share of flows, Jocum said.
However, he believes the recent introduction of more spot Ethereum ETFs globally could trigger a resurgence in investor interest as market awareness grows.
“While cryptocurrencies are seen as more of a ‘risk-on’ asset, bitcoin’s positioning is evolving as some investors view it as a hedge against fiat currency debasement and concerns around the US fiscal position.
“Ethereum’s resilience, meanwhile, will likely hinge on its ability to maintain developer activity, drive institutional adoption, and continue innovating around layer 2 scaling solutions to improve transaction speeds, reduce fees and increase the overall network capacity without comprising security,” Jocum said.
Reflecting on Ethereum’s lacklustre performance to date, he said it has faced headwinds from scalability concerns as it continues its transition to a proof-of-stake model, competition from newer blockchains and security vulnerabilities.
Moreover, he noted, Ethereum is yet to develop a clear mainstream narrative for retail investors, while institutional adoption also remains in its infancy.
