The latest report also suggests that Jane Street Capital will be the “authorized participant” for the Bitcoin ETFs of Fidelity.
Two proposed Bitcoin exchange-traded funds (ETFs) have outlined their fee structures in the event of approval, according to a report from Fortune. Fidelity Investments plans to charge holders of its Wise Origin Bitcoin Trust a yearly fee of 0.39%, while Galaxy/Invesco’s BTCO fund will impose a fee of 0.59% annually, with a waiver for the first six months.
Invesco/Galaxy is in and here's a whopper: it will be waiving fee for first six months AND for first $5b in assets, APs named as well, Virtu and JPMorgan (again lol). Another horse in. Are we having fun yet? pic.twitter.com/mDUOOSnA29
— Eric Balchunas (@EricBalchunas) December 29, 2023
Jane Street Capital will be the “authorized participant” for the Bitcoin ETFs of Fidelity, WisdomTree, and Valkyrie, allowing for arbitrage opportunities. Both sets of ETFs will utilize a “cash” model for creation and redemption, responding to the SEC’s preference for avoiding direct handling of Bitcoin by broker-dealers.
BlackRock Postpones $10 Million Seed Fund
BlackRock, the world’s largest asset manager, had originally intended to acquire an impressive $10 million worth of Bitcoin on January 3rd. However, recent updates indicate a postponement of this purchase by BlackRock.
In preparation for the launch of a Bitcoin exchange-traded fund (ETF), BlackRock’s affiliate, Seed Capital Investor, initially acquired Seed Shares on October 27, 2023. These Seed Shares, totaling 4,000 shares at a per-share price of $25.00, amounted to a total of $100,000. In January, these shares were redeemed for cash, and Seed Capital Investor subsequently purchased the Seed Creation Baskets, comprising 400,000 shares, at the same per-share price.
Nevertheless, recent reports confirm a rescheduling of the seeding process for BlackRock’s highly anticipated Bitcoin ETF. The crucial initial $10 million seeding, originally slated for January 3, shall now happen on January 5th.
Bitcoin Price Expectations After ETF Approval
“We anticipate that significant immediate inflows to the ETFs are unlikely, potentially leading to a ‘sell-the-news’ scenario,” noted K33 Research analysts Anders Helseth and Vetle Lunde in a recent statement. However, they emphasized that these products signify a broader, longer-term shift in buyer interest.
K33’s estimation factors in a 5% chance of the SEC delivering an unexpected rejection of the efforts to launch ETFs directly investing in Bitcoin. The analysts assigned a 75% probability to approval resulting in a “sell-the-news” event and a 20% likelihood of further Bitcoin price increases attributed to ETF inflows.
The rising costs associated with betting on an increase in Bitcoin prices in the futures market indicate a growing “speculative excess” during the token’s current bull run. Such elevated funding costs typically precede periods of volatility, and the nature of this volatility will be influenced by near-term flows in the market.
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