NYDIG cuts Bitcoin fee to 0.3% for investors as Morgan Stanley opens floodgates

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Bitcoin (BTC) institutional investment firm NYDIG has staged an abrupt price cut for investors using it to gain exposure to BTC price action.

In a press release on March 24, the company confirmed that effective immediately, its access fee had been reduced to 0.3%.

Bitcoin buyers pick their premium

The move comes just days after NYDIG’s FS Select NYDIG Bitcoin Fund became one of three products selected by Morgan Stanley to be offered to its wealthy institutional clients.

A potentially timely maneuver, the fee reduction may have consequences for competitors, notably the Grayscale Bitcoin Trust (GBTC), management fees for which currently cost clients 2%.

“NYDIG’s new pricing structure is 50-75% lower than comparable passive bitcoin access products available to investors and, critically, 0.30% represents the true total expense ratio of the fund, including a Big-4 audit and legal, custody, and accounting fees,” the press release claims

As Cointelegraph reported, competition from newcomers forms one explanation as to why GBTC’s premium — how much extra clients pay for Bitcoin exposure on top of the net asset value price — has fallen into record negative territory this year.

At one point, the premium offered a 15% discount to spot price for shares in GBTC. As of March 16, the most recent date for which data is available, it had recovered to around -5.3%.

GBTC premium vs. BTC/USD vs. Grayscale holdings chart. Source: Bybt

Undercutting gold access

Continuing, NYDIG executives built on the sense of anticipation, which CEO Robby Gutmann had established in a recent interview. Prior to the Morgan Stanley announcement, Gutmann had revealed that the coming weeks would see a slew of “game-changing” adoption moves from the institutional sphere.

“Expenses matter, and this will not be our last fee reduction,” founder and executive chairman Ross Stevens commented in the release. 

“Further, as bitcoin’s sound money advantages are more widely understood, I believe it is only a matter of time until U.S. dollar depreciation causes bitcoin’s market cap to surpass that of gold, so it is fittingly symbolic that NYDIG has now made the total cost of bitcoin access 25% lower than the total cost of gold access.”

Gold has seen further slights from investors this week, as CNBC host Jim Cramer conceded that the precious metal’s performance had “disappointed” him. Bitcoin, on the other hand, had made him “a ton of money,” he said.