9 months ago
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The Valkyrie Bitcoin Fund (BRRR) is the first spot BTC ETF to have two custodians including Coinbase and BitGo in a bid to ensure optimal security and higher competitiveness.
Valkyrie Investments, a top-tier asset management firm with around $220 million in assets under management (AUM), has become the first issuer of spot Bitcoin exchange-traded funds (ETFs) in the United States to have more than one custodian. According to United States Securities and Exchange Commission’s (SEC) form 8-k, the Valkyrie Bitcoin Fund (NASDAQ: BRRR) and BitGo Trust Company entered into an agreement on January 17, 2024, to ensure custody and safekeeping of the Trust’s Bitcoins. The two firms highlighted that they share a common purpose and have worked together in the past, thus making the new collaboration more effective.
“Valkyrie has a long-standing relationship with BitGo and is excited to grow the partnership between our firms,” Steven McClurg, Chief Investment Officer of Valkyrie Investments, noted.
Notably, Valkyrie Investments intends to utilize both Bitcoin custodians to ensure optimal performance for the recently launched spot Bitcoin ETF. As of this report, the Valkyrie Bitcoin Trust had around $113 million in total Assets Under Management (AUM) and a cumulative trading volume of about $37 million, thus indicating the majority of the investors have been buying and resting. The fund manager anticipates attracting more investors by demonstrating the security of the Bitcoin holdings amid heightened competition from other issuers like Blackrock Inc. (NYSE: BLK) and Grayscale Investments.
Valkyrie has added @BitGo as a custodian for their #Bitcoin ETF. This is a huge win for the industry as we partner to secure their assets.
Kudos to @valkyriefunds, @LeahWald and @stevenmcclurg for leading the industry with the best approach to mitigate risk in ETF custody. https://t.co/MsSOtZGJ09
— Mike Belshe (@mikebelshe) February 1, 2024
Spot Bitcoin ETF Performance
With the US SEC having approved several spot Bitcoin ETFs altogether to avoid giving any firm a head start, the individual fund managers have been making certain changes to ensure competitiveness in the market. Initially, the fund managers engaged in fee wars in order to attract more customers to their respective spot Bitcoin ETFs. With the Europe-based fund managers also having lowered their fees, experts believe more changes could take place to ensure higher competitiveness. According to Bloomberg ETF analyst James Seyffart, it is more likely for the rest of spot Bitcoin ETF issuers to utilize diversified custodial services.
Ultimately, the winner in the high competition in the spot Bitcoin ETF industry is the underlying value amid the confined bullish market. Furthermore, the fourth Bitcoin halving is less than 79 days away from happening, which will reduce the Bitcoin’s supply by half amid the heightened demand. Additionally, more than 3.3 percent of the total Bitcoin supply is currently held by spot Bitcoin ETFs, with the figure expected to rise in the coming quarters.
Bitcoin price opened the second month of the year on a bullish outlook after teasing below $40k severally last month. With Bitcoin price having reclaimed $43k on Friday, the flagship coin is well positioned to rally above $50k in the near future.
