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Car Dealerships, Dentists Want In on Valkyrie's Bitcoin Trust

The fund opens to accredited investors on May 1. Previously, the vehicle only included a handful of Valkyrie clients.

Apr 30, 2021 at 9:55 p.m. UTC
Updated Sep 14, 2021 at 12:49 p.m. UTC

The Valkyrie Bitcoin Trust will open to all accredited investors on May 1, said Steven McClurg, Valkyrie’s chief investment officer. Previously, the trust had only been open to a handful of Valkyrie clients. 

The trust is seeing interest from institutions as well as firms like dental clinics and car dealerships, McClurg said. Several clients are putting excess cash into bitcoin as a liquid asset to earn yield, he added.

“Some of these companies that have excess cash that aren't being used for operations, they're putting a significant portion of their access cash into bitcoin through the trust,” McClurg said. “In many cases, it is north of 50%.”

The trust has a 40 basis-point management fee that doesn’t include some smaller custodial fees that should disappear as assets under management grow, McClurg said. He declined to reveal the fund’s current AUM.

This comes well below the 2% fee that Grayscale, the world’s largest digital asset manager, charges on the Grayscale Bitcoin Trust and well under the 0.49% management fee that Osprey charges on its closed-end bitcoin fund. (Grayscale is owned by CoinDesk parent company Digital Currency Group.)

Valkyrie has also applied for a bitcoin exchange-traded fund (ETF).

The New York Stock Exchange (NYSE) filed a 19B-4 Form on behalf of the investment firm for its bitcoin ETF late on Friday. The form kicked off a 45-day review period when the U.S. Securities and Exchange Commission (SEC) acknowledges the filing. During that time, the SEC has to either approve or disapprove the application, or extend the review period.

U.S. Bank, quickly emerging as an institutional crypto player, will act as the fund administrator for Valkyrie’s prospective bitcoin ETF and Coinbase will act as the custodian.

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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