Spot ETFs offer an easier and cheaper way to invest in bitcoin
Omar Marques | Lightrocket | Getty Images
It’s cheaper than ever to buy bitcoin.
After 10 years of rejections, the U.S. Securities and Exchange Commission on Wednesday approved 11 applications for bitcoin exchange-traded funds submitted by some of the biggest asset managers in the world, including BlackRock and Fidelity. In many cases, investors will pay lower fees than they would if they bought the digital currency from a crypto exchange directly.
Instead of having to go to an asset exchange such as Kraken, Binance or Coinbase to purchase and hold a token like bitcoin, traders can now turn to a so-called spot bitcoin ETF for direct exposure to the digital asset market. An ETF allows investors to buy a product that tracks the price of bitcoin through the same mechanism they already use to buy stock and bond index funds. This also eliminates the burden of managing their holdings, which typically involves maintaining a cryptocurrency wallet and cold storage to safeguard that investment.
More than 52 million Americans own crypto today, but industry participants are hopeful that the slew of approvals will draw in new retail and institutional investors who have been waiting on the sidelines until traditional financial firms offered an alternative on-ramp to crypto.
“Imagine what will happen once ETFs are introduced and widely available,” Coinbase Chief Operating Officer Emilie Choi said on the company’s most recent earnings call in November. “RIAs, retirement funds, and other institutions that have been precluded from this asset class historically will gain access to crypto for the first time, and that’s very powerful.”
Prior to Wednesday’s approval, the $30 trillion advised wealth management industry in the U.S. had been mostly locked out from accessing the crypto asset class.
Traders are now flush with options for direct exposure to bitcoin, and institutional players are racing to get in the game. In the runup to the SEC’s ultimate decision to approve spot bitcoin ETF applications, many issuers began slashing fees, as recently highlighted by CNBC’s Bob Pisani. The fees are calculated as a percentage of the holdings.
Coinbase’s transaction fee varies, with a max of 0.6% on transactions up to $10,000 in value. In the company’s most recent quarterly earnings call, Choi said Coinbase doesn’t plan to reduce transaction fees even with the emergence of cheaper ETFs. The transaction charges on Coinbase vary between its Pro platform and the retail app, where fees are higher. For retail transactions up to $1,000, the fee ranges between 1.5% and 3%.
ARK, Invesco, Fidelity, WisdomTree and Valkyrie are all offering deals that involve fee-free trading for a certain period of time. Others are opting for discounted fees.
Among spot ETFs, the only one with a fee above 1% is Grayscale Investments, which is charging 1.5%.
The Grayscale Bitcoin Trust, or GBTC, has a few favorable characteristics. Most notably, it has been trading since 2015 as a closed-end fund.
“GBTC was something of a monopoly — they had investors stuck in GBTC paying 2% fees,” said Bryan Armour, director of passive strategies research for North America at Morningstar, a provider of investment research.
Though approval of multiple spot bitcoin ETFs translates to increased fee competition and a way out for current GBTC investors, many traders would take a capital gains tax hit if they exited their GBTC position to purchase another ETF.
Whether the appetite for spot bitcoin ETFs is overblown is another key concern among investors.
Research firm Bernstein, which billed the new spot ETFs as the “largest pipe ever built between traditional financial markets and crypto financial markets,” expects momentum to build slowly.
Analysts with JPMorgan and Mizuho have also cautioned that investor appetite might not be there.
Unlike other commodities that are difficult to own directly, such as a barrel of oil or a gold bar, bitcoin is easier to own.
JPMorgan analysts wrote in a note to investors on Nov. 21 that they see gold ETFs as the most apt gauge for a cryptocurrency ETF outlook.
“Gold ETFs are currently 1.4% of above ground (investible) gold,” the JPMorgan analysts wrote. “We believe that the cryptocurrency markets are pricing in an optimistic impact from Bitcoin ETFs that is likely to fall short of expectations.”
— CNBC’s Jordan Smith contributed to this report.
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National Grid Renewables has broken ground on its 100 MW Apple River Solar Project in Polk County, Wisconsin.
The Wisconsin solar farm, which will use US-made First Solar Series 6 Plus bifacial modules, will be constructed by The Boldt Company, creating 150 construction and service jobs. Apple River Solar will generate over $36 million in direct economic benefits over its first 20 years.
Once it comes online in late 2025, Apple River Solar will supply clean energy to Xcel Energy, which serves customers throughout the Upper Midwest. According to National Grid Renewables, the solar farm will generate enough energy to power around 26,000 homes annually. It will also offset about 129,900 metric tons of carbon dioxide emissions each year – equivalent to taking 30,900 cars off the road.
“We are excited to see this project begin as it underscores our dedication to delivering clean, reliable and affordable energy to our customers,” said Karl Hoesly, President, Xcel Energy-Wisconsin and Michigan. “This project is an important step in those goals while bringing significant economic benefits to Polk County and the local townships.”
Electrek reported in February that Xcel Energy, Minnesota’s largest utility, expects to cut more than 80% – and possibly up to 88% – of its emissions by 2030, putting it on track to hit Minnesota’s goal of net zero by 2040. It also says it’s on track to achieve its clean energy goals for all the Upper Midwest states it serves – Minnesota, Wisconsin, North Dakota, South Dakota, and Michigan.
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Tesla has announced that it will finally deliver 500 kW charging as it is about to install its long-awaited V4 Supercharger cabinets.
The rollout of Supercharger V4 has been a strange one, to say the least.
Tesla has been deploying the new charging stations for two years and calling them “Supercharger V4”, but it has only been deploying the charging stalls.
Supercharger stations are made of two main parts: the stalls, which are where the charging cable is located, and the cabinets, which are generally located further back and include all the power electronics.
For all these new “Supercharger V4”, Tesla was actually using Supercharger V3 cabinets. This has been limiting the power output of the charging stations to 250 kW – although
Today, Tesla officially announced its “V4 Cabinet”, which the automaker claims will enable of “delivering up to 500kW for cars and 1.2MW for Semi.”
Here are the main features of the V4 Cabinet as per Tesla:
- Faster charging: Supports 400V-1000V vehicle architectures, including 30% faster charging for Cybertruck. S3XY vehicles enjoy 250kW charge rates they already experience on V3 Cabinet — charging up to 200 miles in 15 minutes.
- Faster deployments: V4 Cabinet powers 8 posts, 2X the stalls per cabinet. Lower footprint and complexity = more sites coming online faster.
- Next-generation hardware: Cutting-edge power electronics designed to be the most reliable on the planet, with 3X power density enabling higher throughput with lower costs.
Tesla reports that its first sites with the new V4 Cabinets are going into permitting now. The company expects its first sites to open next year.
We recently reported about Tesla’s new Oasis Supercharger project, which includes larger solar arrays and battery packs to operate the charging station mostly off-grid.
Early in the deployment of the Supercharger network, Tesla promised to add solar arrays and batteries to all Supercharger stations, and Musk even said that most stations would be able to operate off-grid.
While Tesla did add solar and batteries to a few stations, the vast majority of them don’t have their own power system or have only minimal solar canopies.
Back in 2016, I asked Musk about this, and he said that it would now happen as Tesla had the “pieces now in place” with Supercharger V3, Powerpack V2, and SolarCity:
It took about 8 years, but it sounds like the pieces are now getting actually in place with Supercharger V4, Megapacks, and this new Oasis project.
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Hyundai has a new secret weapon it’s about ready to unleash. To revamp the brand in China and counter BYD’s surge, Hyundai is launching a new AI-powered EV next year. The new model will be Hyundai’s first dedicated electric car for the world’s largest EV market.
With the help of Haomo, a Chinese autonomous startup, Hyundai will launch its first EV equipped with generative AI. It will also be its first model designed specifically for China.
A Hyundai Motor official said (via The Korea Herald) the company is “working to load the software” onto the new EV model, “which will be released in the Chinese market next year.” The spokesperson added, “The level of autonomous driving is somewhere between 2 and 2.5.”
In comparison, Tesla’s Autopilot is considered a level 2 advanced driver assistance system (ADAS) on the SAE scale (0 to 5), meaning it offers limited hands-free features.
With Autopilot, you still have to keep your eyes on the road and hands on the steering wheel, or the system will notify you and eventually disengage.
Haomo’s system, DriveGPT, unveiled last spring, takes inspiration from the OpenAI’s popular ChatGPT.
The system can continuously update in real-time to optimize decision-making by absorbing traffic data patterns. According to Haomo, DriveGPT is used in around 20 models as it looks to play a bigger role in China.
Hyundai hopes new AI-powered EV boosts sales in China
Electric vehicle sales continue surging in China. According to Rho Motion, China set another EV sales record last month with 1.2 million units sold, up 50% from October 2023.
Over 8.4 million EVs were sold in China in the first ten months of 2024, a notable 38% increase from last year.
BYD continues to dominate its home market. According to Autovista24, BYD accounted for 32.9% of all PHEV and EV (NEV) sales in China through September, with over half of the top 20 best-selling EV models.
Tesla was second with a 6.5% share of the market, but keep in mind these numbers only include plug-in models (PHEV).
Like most foreign automakers, Hyundai is struggling to keep up with the influx of low-cost electric models in China. Beijing Hyundai’s sales have been slipping since 2017. Through September, Korean automaker’s share of the Chinese market fell to just 1.2%.
Last month, Hyundai opened its first overseas digital R&D center in China to help kick off its return to the region.
According to local reports, Hyundai is partnering with other local tech companies like Thundersoft, a smart cockpit provider, and others in China to power up its next-gen EVs
With its first AI-powered EV launching next year, Hyundai hopes to turn things around in the region quickly. The new model will be one of five to launch in China through 2026.
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