"Fee wars" & BTC ETF investing: good or bad?

There has been some recent back-and-forth between companies as they try to entice customers to invest in BTC ETFs by lowering their fees, or waiving them all-together, to draw people into the market.

This image was posted on X (formerly Twitter) January 10th, 2024 by James Seyffart of Blomberg Intelligence.

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10/01/2024 James Seyffart, Bloomberg Intelligence

For many companies fees are waived for the first 6 months, or if >$1 billion USD is invested. In fact of the eleven companies listed, five of them waive fees if investments are greater than $1B USD, and seven of the eleven waive fees until after the estimated BTC halving.

Also important to look at is that Coinbase appears to be the custodian for eight of the eleven ETFs. An article was posted to CoinDesk by David Schwed called "The Biggest Bitcoin ETF Threat No One is Talking About". Besides the point that 2023 was a ripe year for rugs, phishing, and corporate crypto scams - concentrating all those assets (>72%) in one company is just stupid. Remember, when you invest in an ETF - you do not have custody of your coins.

Regardless of loss of custody, there are pros to investing an in ETF, with the most notable being that you can add pseudo-BTC (I say pseudo because you don't have custody) into tax-free, retirement, and other investment vehicles.

However, very large negatives to going into an ETF are (a) you are limited to buy/sell the ETF during stock market hours (no holidays, weekends, and for a limited number of hours a day), (b) you trust a secondary and tertiary party to manage your highly volatile asset (for example, you -> Ark Investments -> Coinbase), and (c) there are management fees for the ETF (you are paying an additional, ongoing fee for the period you invest in an ETF).

Clearly the corporate element wants to onboard consumers prior to the halving, but make sure if you get into the market you are doing so on your terms. Be clear with your own goals and risk tolerance. If you hate Coinbase, do you want to buy a company's ETF if they are just going to get Coinbase to hold it? Are you aware that your crypto ETF investment is not FDIC insured (or CDIC or equivalent body)? Do you trust company promises and competency in light of all the scams out there and not being FDIC insured?

Important things to look out for:

• Most people here aren't investing billions of dollars - so also look at what the fees would be after the fee waiver period.
• Compare the management fees amongst the companies offering ETFs, and any other fees you may be charged while investing. If you don't have a lot to invest and want to reduce the take rate for your investment take a really close look at what fees you are agreeing to pay. I will be looking at my fees and reducing my costs.

I'm not an expert in anything, but in my time here in the sub there are a lot of smart, helpful people. I probably won't have the answer to your question but many here probably will. So, my final piece of advice (yes, this last part is financial advice) - if you are ever ensure about anything - do nothing! Do not get pressured or feel FOMO, yet be unsure about what you're doing, and invest money you need. Talk to your loved ones, your financial planner, and get lots of information before investing your money. Know the risks and implications (for example, ETFs are all AML/KYC), and please don't rush into anything. If anyone tells you that you have to move quickly or you lose out big - they are lying to you.

Happy and safe investing.