By
Chimamanda U. Martha
April 26th, 2024
Despite a recent fee reduction, VanEck will begin a complete fee waiver from today until next year if HODL does not hit $1.5 billion in AUM.
VanEck has decided to suspend the management fee charged on its spot Bitcoin exchange-traded fund (ETF) to encourage more deposits. According to an official X post, this suspension will begin today and continue until the issuer’s assets hit $1.5 billion or until March 31, 2025. VanEck’s HODL ETF previously charged a 0.2% fee, one of the lowest of the active issuers.
VanEck Fee Waiver May Stem from Low Trading Amounts and Volume
VanEck’s post states that it decided to drop the fee because of its belief in Bitcoin. However, speculation suggests that the issuer is struggling to attract investments, especially compared with others. According to reports, VanEck has only crossed the $305 million mark in assets under management. In comparison, some other funds have passed $1 billion. For instance, BlackRock Inc’s iShares Bitcoin Fund (IBIT) has an impressive $13 billion, currently the highest outside of Grayscale’s Bitcoin Trust (GBTC). The GBTC ETF, which was a private fund before it got approval for conversion, already had about $30 billion.
The fee waiver brings attention to VanEck’s ETF, especially since there was a fee review last month. The issuer had announced a reduction from 0.25% to 0.20% starting on February 21. According to a spokesperson at the time, the fee reduction was to help VanEck remain committed to providing increased value and access to investors. VanEck also said it wanted to keep helping investors take advantage of “one of the most competitive offerings in the Bitcoin ETF space”.
The day before the reduction was to kick off, HODL recorded a significant increase in trading volume. In an X post, Bloomberg Senior ETF Analyst Eric Balchunas stated that HODL had already recorded $258 million, which was a 14x spike over the product’s daily average. Balchunas also pointed out that the funds came from 32,000 individual trades instead of one big investor, which is 60x the average.
VanEck Europe
Interestingly, VanEck believes that crypto will become more important to the company. According to Martijn Rozemuller, the CEO of VanEck Europe, crypto currently accounts for 10% of the company’s income. The other 90% comes from conventional investments through traditional offerings like ETFs. However, he expects this to rise soon. Rozemuller says that “crypto will become more important…and it will be closer to 50/50”.
Currently, VanEck Europe has issued about 50 ETFs on several stock exchanges in Europe. In 2021, the company launched the VanEck Crypto and Blockchain Innovators UCITS ETF. The ETF holds several crypto and blockchain stocks, including Coinbase Global, Bitfarms, Marathon Digital, Microstrategy, Block, and others. The ETF is one of the 15 best-performing products by assets under management (AUM), in the company’s portfolio.
Last October, VanEck launched an Ether (ETH) futures exchange-traded fund (ETF) called the VanEck Ethereum Strategy ETF (CBOE: EFUT). The product is structured as a C corporation, which separates the shareholders’ or owners’ tax obligations from those of the entity.
