CoinShares International Limited (NASDAQ Stockholm: CS) (OTCQX: CNSRF) exercised its option to acquire digital asset manager Valkyrie Funds LLC from Valkyrie Investments Inc, boosting its assets under management (AUM) by USD$110 million.
CoinShares announced the decision to acquire Valkyrie’s exchange-traded funds (ETF) handler on Tuesday based on the Security and Exchange Commission’s recent decision to allow Bitcoin spot ETF’s after close to a decade of denials.
This move aligns with CoinShares’ strategy to expand its digital asset offerings in the U.S. market, capitalizing on the positive developments in the U.S. regulatory landscape.
This increase corresponds to the current AUM level within Valkyrie’s existing ETF products: The Valkyrie Bitcoin Fund (Nasdaq: BRRR), The Valkyrie Bitcoin and Ether Strategy ETF (NASDAQ: BTF), and The Valkyrie Bitcoin Miners ETF (NASDAQ: WGMI).
“Since our inception in 2014, CoinShares has consistently led the European digital asset industry, setting benchmarks for transparency and investor protection with its regulated digital asset products,” Jean-Marie Mognetti, the CEO of CoinShares, said.
“Our expertise has enabled us to dominate the European market, commanding over 40 per cent of all assets under management in crypto exchange traded products (ETP). Exercising our option to acquire Valkyrie Funds aims at extending our European success in the U.S, offering unparalleled access to regulated digital asset products to American investors.”
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What is a Bitcoin Spot ETF?
The SEC granted approval for Bitcoin spot ETF’s last week. This approval marks a step that simplifies the process for ordinary investors to invest in digital currency.
The commission has also given the green light to several financial firms to offer spot Bitcoin ETFs. A few of these include industry giants like BlackRock, Fidelity Investments, and Franklin Templeton, which cater to retail investors.
Prior to this, only Bitcoin futures ETFs had received approval from the SEC. As a result of the SEC’s approval of these ETFs, Bitcoin prices have surged, more than doubling since last year.
Furthermore, even before this approval, cryptocurrency prices had already risen by 61 per cent since October. The price increases were driven by expectations of the SEC’s plans to approve spot ETF applications.
A Bitcoin Spot ETF provides investors with exposure to the actual, physical Bitcoin asset. Investors can trade shares on traditional stock exchanges, providing them with a convenient and regulated way to invest in Bitcoin. Additionally, this removes the hassle of managing digital wallets or cryptocurrency exchanges. It also closely tracks the real-time market price of Bitcoin.
Unlike Bitcoin futures-based ETFs, which derive their value from futures contracts, a Bitcoin Spot ETF holds the underlying Bitcoin asset in its portfolio. This means that the ETF’s performance directly reflects the movements in the spot market price of Bitcoin.
The SEC approved 11 spot bitcoin ETFs. The biggest names include Grayscale Bitcoin Trust (NYSE: GBTC), Fidelity Wise Origin Bitcoin Trust, VanEck Bitcoin Trust and BlackRock’s iShares Bitcoin Trust.
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