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Even if you have no interest in crypto, the current frenzy around Bitcoin ETFs is interesting purely as a matter of competitive strategy. There is a brand new market up for grabs that will be worth billions—perhaps trillions—and at least 13 companies are vying to get a piece of it. If the predictions are correct, and the SEC lets the process go forward as a pure jump ball on Wednesday, who will be the winner? The would-be ETF issuers are making respective cases that the prize the will go to the cheapest or the safest or the swiftest or the one with the most Bitcoin cred.

We will get the answer soon enough, but for now the one thing we do know is that the market isn’t big enough for everyone to win. Historically, the nature of new ETFs is that one player takes the vast majority of the market while one or two others carve out a niche worth 10% or less. In the case of the impending Bitcoin ETFs, it’s possible things could shake out differently given the very different nature of the firms lining up to offer one.

On one hand, there are the giant asset managers from traditional finance—BlackRock, VanEck, Fidelity, and Franklin Templeton—that are all planning to offer Bitcoin ETFs with fees of around 0.3%. It is these firms that appear best positioned to attract the institutional investors who haven’t touched Bitcoin but will line up to get some exposure now that it’s for sale in the safe and familiar wrapper of an ETF. Well, in theory at least. The crypto world is convinced such investors represent billions in pent-up demand, but no one knows for sure. It’s possible they could defy the winner-take-all history of ETFs and split their business among the big asset managers—or they might just take a look and continue to say “pass.”

Then there are the crypto-native purveyors like Bitwise and Galaxy that are flexing their longtime Bitcoin cred to say they are best positioned to take the Bitcoin ETF crown. The CEO of one such purveyor, Valykrie’s Steve McClurg, sat down with Fortune to make the case that a chunk of the market will seek out a familiar name like BlackRock, but another segment will prefer “Bitcoin experts” like his firm. We’ll see.

Then there is Grayscale, the biggest wild card in the mix by far. Grayscale is the closest thing to an incumbent as the firm is sitting on around 3% of the world’s Bitcoin, which it has been selling for years in the form of shares in a trust. When the SEC grants approval for a Bitcoin ETF, the company is poised to flip a switch and convert all of those to ETF shares—a potential technical advantage that could let it be the first to list.

Grayscale has another structural advantage that will give it a big chunk of the new Bitcoin ETF market. Namely, the hundreds of thousands of customers who now own shares of its trust will automatically become owners of the Grayscale ETF. Better yet for Grayscale, many of those customers will be reluctant to ditch the company for another provider since doing so would force them to pay capital gains taxes. That’s why Grayscale plans to charge an eye-popping 1.5% fee for its Bitcoin ETF—better than the 2% levy it has been collecting as a trust company but still five times higher than some of its future competitors. The economics of this plan make sense in the short term, but it will make it hard or impossible to draw in new customers, so Grayscale may need to develop new business lines in a hurry.

For now, this is all speculation, of course, and we will have to wait until later this week to find how this will all shake out. All we know for sure is that there may be more than one winner in the race to launch to a Bitcoin ETF—and that there will also be plenty of losers.

Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts

DECENTRALIZED NEWS

The brief bubble in Solana memecoins has popped as the likes of dog-themed BONK fell more than 70% in December. (CoinDesk)

In the latest twist of regulatory infighting in New York, the state's comptroller said the BitLicense regime created by the state's Department of Financial Services has proved inadequate. (Bloomberg)

Bitcoin experienced a mini-rally on Monday, climbing around 7% to $47,000. (WSJ)

SEC Chair Gary Gensler returned to social media yet again to warn people of the perils of crypto investing. (CoinDesk)

Fidelity has chosen Cumberland and Jane Street to collaborate on its forthcoming Bitcoin ETF. (Bloomberg)