Valkyrie Adds Second Guardian Bitcoin to ‘BRRR’ Bitcoin ETF
Asset management firm Valkyrie has added digital asset trust company BitGo as a custodian for its recently launched Bitcoin Exchange Traded Fund (ETF).
In an 8-K filing with the United States Securities and Exchange Commission (SEC) on February 1, the company disclosed that Valkyrie Bitcoin Fund and BitGo entered into a custody services agreement on January 17 that will see BitGo provide related services. Valkyrie ETF to secure and protect Bitcoin (BTC) holdings.
The company, however, said it still plans to use Coinbase as a custodian, and that it understands the Bitcoin ETF issuer is a place to improve its digital asset custodians.
Valkyrie expects that the sponsor will use the custodial services of both Coinbase and BitGo to protect the trust's bitcoin.
Excited to announce @ValkyrieFunds has selected BitGo as the qualified custodian for its Bitcoin ETF ($BRRR).
Providing secure institutional access to digital assets together https://t.co/BgkkJZTHs9
— BitGo (@BitGo) February 1, 2024
BitGo now acts as the custodian for two Bitcoin ETF issuers – the other being Hashdex – however, Coinbase serves as the custodian for most of the Bitcoin ETFs launched in January.
In a February 1 X post, BitGo CEO Mike Belshe referred to custodial diversification as a “best approach” to address concerns related to ETF protection.
“This is a big win for the industry,” he said.
Valkyrie added @BitGo to their #Bitcoin ETF as a custodian. This is a huge win for the industry as we work together to protect their assets.
Thanks to @valkyriefunds , @LeahWald and @stevenmcclurg for leading the industry with a better approach to managing risk in ETF holdings. https://t.co/MsSOtZGJ09
— Mike Belshe (@mikebelshe) February 1, 2024
Bloomberg ETF analyst James Seifert wouldn't be surprised if other ETF issuers follow Valkyrie's lead.
The Valkyrie spot Bitcoin ETF, ticked BRRR, holds $113.5 million in Bitcoin as of January 31 data shared by BitMEX Research. It is the seventh-largest Bitcoin holder among Spot Bitcoin ETF issuers.
Meanwhile, BlackRock and Fidelity lead the way among new Bitcoin ETF issuers with $2.83 billion and $2.36 billion in Bitcoin holdings, respectively.
Related: Wall Street's New Asset Class: Will Grayscale Survive the Bitcoin ETF Era?
The 10-position Bitcoin ETF issuers have been locked in a trading and fee war for months.
On January 29, Invesco and Galaxy lowered their management fees from 0.39% to 0.25%. BlackRock and ARK 21Shares also cut their management fees before their bitcoin ETFs were finally approved.
Greyscale Investments, which turned Bitcoin trusts into an ETF form, currently sports the largest management fee of 1.5%.
Bitcoin ETFs launched on January 11 after the SEC gave the green light on January 10.
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