A well-known asset management company has decided to eliminate fees for its Ethereum and Bitcoin exchange-traded products (ETPs). This announcement has generated significant market interest in the interim, particularly in light of the expanding demand for these financial vehicles worldwide.
A new study states that this charge will expire on January 3, 2025, at which point a nominal fee of 0.29% will take effect.
Global X Removes All Cryptocurrency ETP Fees
The exchange-traded fund provider Global X ETFs, based in the United States and controlled by Mirae Asset of South Korea, temporarily eliminated fees for its physically-backed Ethereum and Bitcoin ETPs. Notably, with a total expense ratio of 0.65%, these products were first listed in March 2022 on the Xetra Exchange in Frankfurt and the Six Swiss Exchange in Zurich.
Meanwhile, according to Rob Oliver, head of Global X ETFs in Europe, fee reductions are intended to show traders and the E.U. region that Global X is “committed” to their work.
These Jersey-backed ETPs are now quite tiny in size. The Ethereum product managed assets of about $5.7 million as of May 24, while the Bitcoin ETP managed about $4.3 million.
Meanwhile, the fee reduction has drawn a lot of interest despite their small size and may attract more investors to these products.
Growing Interest Worldwide
Global X’s cost reduction coincides with other companies entering the cryptocurrency ETP market. Recently, WisdomTree and 21Shares introduced products that invest in physically backed Bitcoin and Ethereum on the London Stock Exchange.
The businesses assert that the 0.35% management expense ratio of these Ethereum and Bitcoin ETPs is among the lowest for institutional-grade ETPs. However, clearance from the U.K.’s Financial Conduct Authority (FCA) is required for entry to the main market of the London Stock Exchange.
To put things in perspective, the FCA has permitted selling cryptocurrency exchange-traded notes to accredited investors while continuing to prohibit retail purchases. This legal framework highlights the U.K.’s cautious but developing approach to cryptocurrency investments.
The announcement of Global X’s cryptocurrency ETP issuer fee reduction comes when the U.S. Spot Bitcoin ETF market is seeing much activity. These U.S. Spot Bitcoin ETFs have witnessed significant inflows recently; on Monday, June 3, $105.1 million was added. Notably, this inflow shows that investors are becoming increasingly confident in Bitcoin as a sound investment alternative.
