The Shark Tank star and chairman of O’Shares ETFs explained his reasons for avoiding the newly approved spot Bitcoin ETFs, which invest directly in the cryptocurrency. He said he prefers to own Bitcoin directly and avoid paying extra fees to the fund managers. He also predicted that Fidelity and BlackRock, two of the largest asset managers in the world, will dominate the Bitcoin ETF market because of their established distribution channels and trust among investors.
Paying Annual Expense Ratios
Venture capitalist Kevin O’Leary, also known as Mr. Wonderful on the TV show Shark Tank, said he would never buy a spot Bitcoin ETF, which is an exchange-traded fund that holds Bitcoin as the underlying asset. He made this statement in an interview with Fox Business on Thursday, Jan. 11, 2024, the day the first spot Bitcoin ETFs started trading in the U.S.
O’Leary, who is the chairman of O’Shares ETFs, a family of exchange-traded funds focused on quality and income, said he already owns Bitcoin and does not see the need to pay extra fees to the fund managers of the spot Bitcoin ETFs. He said he prefers to own Bitcoin directly and avoid paying the annual expense ratios, which range from 0.20% to 1.50% among the 11 spot Bitcoin ETFs approved by the Securities and Exchange Commission (SEC).
ETF Fees Will Eventually Go Up
He also said he is not impressed by the fee wars among the spot Bitcoin ETF issuers, some of which are offering zero fees for the first six months or the first $5 billion in assets. He said these are just marketing gimmicks and that the fees will eventually go up. He said he is more concerned about the security and custody of his Bitcoin, which he entrusts to Fidelity Digital Assets, a subsidiary of Fidelity Investments that provides institutional-grade crypto services.
Who Will Dominate Bitcoin ETF Market?
O’Leary predicted that Fidelity and BlackRock, two of the largest and most reputable asset managers in the world, will ultimately lead the Bitcoin ETF market because of their large sales forces and their trust among investors. He said these firms have the advantage of having established distribution channels and relationships with brokers, advisors, and institutions. He said he would consider buying a Bitcoin ETF from Fidelity or BlackRock if they offer one in the future.
O’Leary’s views contrast with those of some crypto enthusiasts and analysts, who see the spot Bitcoin ETFs as a positive development for the industry and a catalyst for more adoption and innovation. They argue that the spot Bitcoin ETFs will provide easier and cheaper access to Bitcoin for retail and institutional investors, as well as more transparency and liquidity for the market.