VanEck has filed an application with the U.S. Securities and Exchange Commission to launch an ETF that would undercut its rivals.
A second exchange-traded fund based on Bitcoin futures was launched in the U.S. on Friday, but the mood was dampened by a price correction.
Some analysts are now predicting that a “brutal” price war could break out — with VanEck filing an application with the U.S. Securities and Exchange Commission to launch an ETF that would undercut its rivals.
Why Low ETF Fees Matter
“At the end of the day, Bitcoin futures ETFs are commodity products. Costs matter and I expect a brutal fee war to play out in this category. [This] is the opening salvo in what will be a ruthless, ongoing fee competition.”
Fellow analysts agreed — warning that ProShares will lose its first-mover advantage if significant fee differences are available.
All of this comes as crypto exchanges increasingly prepare for similar battles, with a number of smaller trading platforms attempting to woo users by slashing the fees that are charged for every trade.
Such a price war could prove damaging for market leaders, especially because transaction fees account for most of their revenues. Coinbase has been seeking to diversify its business as a result — and recently unveiled plans to launch a new marketplace for non-fungible tokens.
Although ETFs are regarded as a good thing when it comes to boosting Bitcoin’s credibility as a viable investment option, there are concerns that these exchange-traded funds may struggle to act as a reliable barometer for spot prices.
As a result, the performance of these funds over the coming weeks and months will be closely watched by analysts — many of whom believe gaining exposure to Bitcoin directly remains the best play when it comes to crypto.
What also remains to be seen is whether a physically backed Bitcoin ETF will be given the green light for launch. The SEC has repeatedly delayed a number of applications — and as of now, a ruling isn’t expected until later in November and December.