Valkyrie Launches ETF to Track Bitcoin Balance Sheet Stocks

Long on MicroStrategy, the actively managed ETF brings another crypto-tinted product to Wall Street’s ranks.

Dec 15, 2021 at 2:01 p.m. UTC
Updated Dec 15, 2021 at 10:37 p.m. UTC

A new exchange-traded fund (ETF) from crypto manager Valkyrie invests in companies with big bitcoin bags, according to a regulatory filing published Wednesday.

Balance Sheet Opportunities ETF, trading as VBB on Nasdaq, is long on MicroStrategy, Square, Tesla and other crypto industry bulls. An actively managed thematic ETF, it steers clear of bitcoin futures, sticking only to equities that invest in the coin.

The ETF is the latest example of mainstream financial instruments with a crypto tilt and comes at a time when about $70 billion worth of bitcoin is sitting on corporate balance sheets.

VBB probably won’t command the billion-dollar inflows that U.S. bitcoin futures ETFs garnered in their watershed November debut, Steve McClurg, Valkyrie’s chief investment officer, told CoinDesk. Still, he said the more traditional structure has a “bigger market” to tap.

“Futures mostly appeal to hedge funds and momentum traders,” McClurg said in an interview. “The reality is there’s a lot of financial advisors that can’t actually use it in their platform” in part because of futures market-specific quirks, like contango.

An ETF that invests in the stock of bitcoin-forward companies might be more palatable, McClurg said.

BlackRock, Mastercard, Robinhood, PayPal, Overstock, BTCS and Coinbase round out VBB’s top 10 holdings at launch.

Not all of those corporations invest directly in bitcoin. BlackRock, the world’s largest asset manager, has publicly disclosed investments in bitcoin futures. McClurg said its inclusion helps VBB maintain a diversification that he said actually helps it track closer to bitcoin.

Correction (Dec. 15, 14:30 UTC): The ETF is actively, not passively, managed.

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Danny is CoinDesk's deputy business editor. He owns BTC, ETH and SOL.

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