Bitcoin ETF Fee Cut Proves Effective as VanEck Sees Record Inflows

VanEck has experienced record daily inflows in its Bitcoin ETF after cutting its management fees.

On Monday, the investment manager said it would offer a 0% management fee from 12 March 2024 until 31 March 2025. However, VanEck stated the fee cut will only apply for the first $1.5 billion of the trust's assets. Fees on assets over $1.5 billion will be 0.2%.

Is VanEck’s Bitcoin ETF Fee Cut Due to Competition or Underperformance?

VanEck’s temporary 0% management fee undercuts BlackRock’s 0.25% charge but will it guarantee improved performance?

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VanEck stated the fee cut is due to it "believing in Bitcoin so much" but sceptics pointed towards the fund's "underperformance."

HODL, listed on BATS Global Markets, had previously imposed a 0.2% fee, which was one of the lowest among its competitors – BlackRock, Fidelity, Invesco, WisdomTree, and Valkyrie charge 0.25%.

No matter the incentive, the move seems to have worked. BitMEX data shows that HODL attracted $119 million in one day. Its highest day was previously on 19 January 2024, when the fund saw inflows of $14.2 million.

HODL is now the sixth-largest U.S.-listed spot Bitcoin ETF, with over 6,000 BTC in AUM, overtaking Invesco and Valkyrie.

Total daily inflows on Monday amounted to almost $1 billion from the funds, offsetting Grayscale's $500 million outflows.

Earlier this week, BlackRock's Bitcoin ETF broke records by reaching $10 billion faster than any US ETF in history. The fund reached the milestone in under two months from 11 January when the SEC greenlit Bitcoin ETFs. Invesco QQQ previously held the record of just over a year.