Crypto Asset Manager Valkyrie Investments Wants to Sponsor, Manage Grayscale Bitcoin Trust

GBTC, the world’s largest bitcoin fund, has been trading at near a record discount relative to the price of bitcoin.

AccessTimeIconDec 30, 2022 at 9:59 p.m. UTC
Updated May 9, 2023 at 4:05 a.m. UTC

Crypto asset manager Valkyrie Investments wants to become the sponsor and manager of the Grayscale Bitcoin Trust (GBTC), the company said in a blog post this week.

Valkyrie, one of Grayscale’s rivals, previously launched a bitcoin trust and a bitcoin-related exchange-traded-fund (ETF) in 2021. As part of their plan to sponsor GBTC, the world’s largest bitcoin fund, the Tennessee-based company also announced the launch of a new fund, the Valkyrie Opportunistic Fund, LP that seeks to take advantage of GBTC’s discount to the value of its underlying bitcoin, the company said.

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  • Valkyrie’s plan would be a tall order, considering that GBTC alone has over $10 billion in assets and Valkyrie only handles roughly $180 million in total assets.

    “We understand that Grayscale has played an important role in the development and growth of the bitcoin ecosystem with the launch of GBTC, and we respect the team and the work that they have done,” Valkyrie said. “However, in light of recent events involving Grayscale and its family of affiliated companies, it is time for a change.”

    Grayscale and CoinDesk are both owned by the Digital Currency Group.

    In its proposal, Valkyrie said it wants to facilitate GBTC redemptions at net asset value (NAV) for investors through a Regulation M filing. It also proposes to lower the fees to 75 basis points as opposed to the current 200 basis points, and to offer redemptions in both bitcoin and cash.

    Earlier this month, GBTC shares hit a record-high discount rate of over 50% relative to the price of bitcoin (BTC). GBTC’s recent struggles were triggered by the Security and Exchange Commission’s (SEC) reiteration of its reasons for denying Grayscale Investment’s application to convert GBTC into a spot bitcoin ETF. Grayscale called the initial denial “arbitrary, capricious and discriminatory.”

    Grayscale did not immediately return a request for comment.

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    Helene Braun

    Helene is a New York-based reporter covering Wall Street, the rise of the spot bitcoin ETFs and crypto exchanges. She is also the co-host of CoinDesk's Markets Daily show. Helene is a graduate of New York University's business and economic reporting program and has appeared on CBS News, YahooFinance and Nasdaq TradeTalks. She holds BTC and ETH.