Bitcoin Spot ETF: Bitwise Closes Ranks With $200 Million Seed Fund

The competition among the Spot Bitcoin ETF issuers is heating up as the period for potential approval of these funds draws nearer. Asset manager Bitwise is the issuer currently making waves as it could potentially outrank the world’s largest asset manager, BlackRock, in terms of seed funds for their respective ETFs. 

Bitwise’s latest amendment to its S-1 filing with the Securities and Exchange Commission (SEC) shows that the asset manager has gotten interest from an investor to have its ETF seeded with $200 million upon launch. Bloomberg analyst Eric Balchunas highlighted its significance as he stated that it “blows away” BlackRock’s initial seed fund of $10 million. 

The analyst noted that Bitwise actually seeding its ETF with such an amount could be a “huge help” in the early days of the race. It is believed that the SEC is likely to approve the pending ETF applications simultaneously. As such, Bitwise being able to create $200 million of shares could give the asset manager an advantage in terms of meeting demands by clients. 

Bitwise had previously shown its intention to lead the way from the get-go following the release of its Bitcoin ETF commercial. This move could help the asset manager gain much interest in its Bitcoin ETF even before launch. That way, the public sees it as the first choice upon launching.

Notably, Bitwise didn’t mention who the authorized participant (AP) for its ETF would be. The AP would act as the middleman between the ETF investor and issuer, as they are responsible for creating and redeeming the ETF shares. While Bitwise failed to name its AP, other issuers like BlackRock however included it in their latest S-1 filing with the SEC. 

Spot Bitcoin ETF issuers made some notable inclusions in their latest and final amendment to their S-1 filings. These inclusions also give an idea of what strategy these issuers may be looking to adopt in order to lure investors to their funds. In Fidelity’s case, the asset manager will be looking to entice investors with its relatively low fees.

Balchunas noted that Fidelity’s ‘sponsor fee’ of 0.39% happens to be the lowest so far among other issuers that have made theirs known. Interestingly, Invesco is adopting a more enticing strategy as they revealed in their latest amendment that they will be waiving fees for the first six months and the first $5 billion in assets. 

The Bloomberg analyst mentioned that the fee war is going to continue being a thing in the Spot Bitcoin ETF terrain as issuers will be looking to outdo themselves.