Valkyrie wants to 'manage and sponsor' Grayscale's GBTC

Quick Take

  • Valkyrie Investments said it has a proposal for Digital Currency Group’s struggling Grayscale Bitcoin Trust and that it’s ready to become a “sponsor and manager” of the fund.
  • The firm also said it formed Valkyrie Opportunistic Fund, LP to capitalize on “the massive discount in the spread between the NAV [net asset value] and price of GBTC.” 

Valkyrie Investments said it has a proposal for Digital Currency Group’s struggling Grayscale Bitcoin Trust and that it's ready to become a "sponsor and manager" of the fund.

We are well-equipped to handle the unique challenges and opportunities presented by GBTC," the company said in a statement on Dec. 28. "Our combination of technical and regulatory knowledge and hands-on experience makes us the ideal choice to take on this role.”

The firm also said it formed Valkyrie Opportunistic Fund, LP to capitalize on “the massive discount in the spread between the NAV [net asset value] and price of GBTC.” A Valkyrie spokesperson told The Block that it's targeting an initial $75 million.

The fund will be used to increase GBTC holdings to realize “the true value of the underlying bitcoin for our investors,” according to the statement.

The firm proposed key improvements it would implement for GBTC management, such as allowing investors to redeem GBTC at net-asset value via a Regulation M filing.

In addition, Valkyrie said it wanted to lower fees from 200 basis points to 75 basis points to better reflect industry practices. It also wants to make an effort to provide redemptions for bitcoin and cash to “give investors greater flexibility and choice when it comes to redeeming their shares.”

Grayscale’s fund hit an all-time low of 48.89% in terms of the discount to NAV on Dec. 13, and GBTC’s price is down 77% year-to-date.

"In light of recent events involving Grayscale and its family of affiliated companies, it is time for a change," Valkyrie said.

Grayscale did not immediately respond to a request for comment from The Block. 


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