Valkyrie, Osprey Beat Grayscale to Market With Polkadot DOT Trust

Valkyrie is charging a 2% management fee on the fund, just under Osprey’s 2.5%. Are DOT funds the new BTC funds for buttoned-up investors?

Apr 30, 2021 at 9:15 p.m. UTC
Updated Sep 14, 2021 at 1:47 p.m. UTC

Valkyrie Digital Assets has launched a Polkadot fund with a twist.

The investment vehicle will give clients access to the appreciation of the underlying DOT tokens but also the 8% yield from Valkyrie staking the asset through Coinbase Custody.

Valkyrie follows Osprey Funds, which launched the first DOT fund earlier this week but without the staking perks. Grayscale Investments, the world’s largest digital asset manager, which is owned by CoinDesk parent company Digital Currency Group, has incorporated a DOT trust but has yet to launch it. 

“Polkadot has the promise of being a faster network, with lower gas fees that can support a lot of different assets,” Steven McClurg, Valkyrie’s chief investment officer, said in an interview. “It is more of a speculative play on the future growth and future usability of that protocol.” 

Many of the same institutions that are interested in Osprey’s bitcoin fund are also interested in the DOT fund, Osprey CEO Greg King said. 

“It’s pretty compelling as a potential layer one platform that facilitates a multichain universe,” King said.

Valkyrie is charging a 2% management fee on the fund, coming just under Osprey’s 2.5%. Both firms have decided to waive fees for the first two years. Osprey currently manages $10.6 million in its Polkadot fund, and Valkyrie is launching with $10 million assets under management. 

Coinbase is the custodian for the Valkyrie fund, Cohen & Company handles audit and tax, Theorem Fund Services acts as the fund administrator and Chapman and Cutler LLP is the legal counsel. 

On the Osprey fund, Coinbase is the custodian, Theorem is the fund administrator, Murphy & McGonigle are outside counsel and Morgan Lewis handles tax issues.

DOT is currently the ninth-largest cryptocurrency with a market capitalization of $38 billion, according to CoinDesk data.

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