In a strategic move responding to the evolving digital asset market, Invesco and WisdomTree, two prominent asset management firms, have significantly reduced fees on their European exchange-traded products (ETPs) linked to Bitcoin. This development comes on the heels of the U.S. Securities and Exchange Commission's recent approval of Bitcoin ETFs, signaling a growing competitive landscape in cryptocurrency investments.

The fee reductions are substantial: Invesco's Physical Bitcoin ETP, valued at $137 million, will now have its fees reduced from 0.99% to 0.39%. Similarly, WisdomTree's Physical Bitcoin ETP, with assets of $325 million, will see fees drop from 0.95% to 0.35%. These adjustments represent more than a 60% cut in fees for both products, underscoring the intensifying competition in the market.

In Europe, digital asset ETPs are typically structured as exchange-traded notes (ETNs), with investors owning a debt security. This contrasts with the U.S., where ETF shareholders own part of the fund's underlying assets. The recent approval of 11 spot Bitcoin ETFs in the U.S. has shifted the investment focus, reducing the demand for European ETPs among U.S. investors.

Gary Buxton, Invesco's head of ETFs for Europe, in an interview with Financial Times, emphasized that the U.S. market's lower ETF fees have set a new balance between supply and demand, leading to lower prices than those of existing European ETPs. He highlighted that the presence of multiple ETFs in the U.S. has been instrumental in driving down costs.

Notably, U.S.-based Bitcoin ETFs offer greater liquidity and are more readily accessible on a single exchange platform, making them increasingly attractive to European investors. Since their launch, these U.S. ETFs have witnessed billions in trading volume from the outset, maintaining high trading volumes consistently. This trend indicates a significant shift in the digital asset investment landscape, both in Europe and globally.