Valkyrie Chooses BitGo as Custodian for its Spot Bitcoin ETF, Diversifies Digital Asset Trust
Summary:
Valkyrie, an asset management firm, has appointed BitGo as the custodian for its newly launched spot Bitcoin ETF's holdings. This move makes Valkyrie the first issuer to diversify its digital asset custodianship, intending to use both BitGo and Coinbase Trust Company to safeguard its Bitcoin trust. The decision represents a significant progression for the industry, with BitGo also holding custodial responsibilities for Hashdex, another spot Bitcoin ETF issuer. Valkyrie's spot Bitcoin ETF currently holds $113.5 million in Bitcoin, positioning itself as the seventh largest Bitcoin holder among issuers. Prominent Bitcoin ETF issuers, BlackRock and Fidelity, lead in Bitcoin holdings with $2.83 billion and $2.36 billion, respectively.
Valkyrie, an asset management firm, has designated BitGo, a digital asset trust company, to secure the Bitcoin (BTC) holdings of its recently initiated spot Bitcoin exchange-traded fund (ETF). The information, central to an 8-K disclosure to the United States Securities and Exchange Commission on the first day of February, clarified that Valkyrie Bitcoin Fund and BitGo Trust Company agreed on custodial services on January 17th. Through this agreement, BitGo ensures the custodial and conservation services of the Bitcoin holdings of the new Valkyrie ETF. Valkyrie announced plans to also retain Coinbase Trust Company as a custodian and it's believed to be the first Bitcoin ETF issuer to diversify its digital asset custodianship. Valkyrie sees the benefit in using both Coinbase and BitGo to secure the Trust's Bitcoin holdings.
BitGo also serves as custodian to another spot Bitcoin ETF issuer, Hashdex, although presently, Coinbase handles the custodianship for most spot Bitcoin ETFs launched in January. BitGo CEO, Mike Belshe, underscored custodian diversification as a vital strategy to lessen risks inherent to ETF custody in a post dating February 1st. He labeled this a significant advancement for the sector.
Bloomberg ETF analyst, James Seyffart, anticipates that other ETF issuers might imitate Valkyrie's method. The Valkyrie spot Bitcoin ETF, represented by the ticker BRRR, boasts $113.5 million Bitcoin backing with data from BitMEX Research indicating it as the seventh largest Bitcoin holder among spot Bitcoin ETF issuers as of January 31st. Impressive Bitcoin ETF issuers, BlackRock and Fidelity, outshine others with Bitcoin holdings of $2.83 billion and $2.36 billion respectively.
Over the past few months, a battle over marketing and fees waged among Bitcoin ETF issuers. On January 29th, Invesco and Galaxy cut their management fees from 0.39% to 0.25%. BlackRock and ARK 21Shares also reduced management fees prior to their Bitcoin ETFs receiving approval. Grayscale Investments, which transitioned its Bitcoin trust into spot ETF form, currently owns the title for the largest management fee at 1.5%. Spot Bitcoin ETFs were launched on January 11th subsequent to the approval of the United States securities regulatory body on January 10th.
Published At
2/2/2024 2:08:13 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.