The state of the grayscale Bitcoin Trust (GBTC), the largest BTC trust in the world, has raised concerns among investors in this area. With such a large discount to net asset value (NAV), there has been debate as to where the fund is going and whether it will run into trouble. Valkyrie Investments has now joined the conversation but is taking a completely unexpected path.
Valkyrie wants the Grayscale Bitcoin TRUST
In a statement released Dec. 28, Steven McClurg, co-founder and CIO of Valkyrie Investments, revealed the company’s interest in taking over the management of Grayscale Bitcoin Trust. The statement highlights the unique challenges faced by GBTC and introduces the Valkyrie team as the best team to manage the fund.
It points to its experience managing its own Bitcoin fund, which has operated with daily liquidity since its inception a year ago. Additionally, it cites its experience with its multiple publicly traded BTC ETFs launching in 2021 as a good reason why it would be a good fit.
“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 they have done,” the statement said. However, with recent events affecting Grayscale and its family of affiliates, it’s time for a change. Valkyrie is the best company to manage GBTC to ensure its investors are treated fairly.”
The company also announced a brand new fund called the Valkyrie Opportunistic Fund, LP, which it says was launched to help investors take advantage of GBTC’s discount to NAV. “We are very interested in realizing the true value of underlying Bitcoin for our investors and will actively pursue this goal on their behalf,” McClurg said.
GBTC sells trading at $8.11 | Source: Grayscale Bitcoin Trust (BTC) on TradingView.com
The roadmap to success
Valkyrie’s statement also included his plan to actually upgrade the management of the Grayscale bitcoin trust should it take over. These were divided into three points.
The first was that it is planned to facilitate orderly redemptions at NAV for investors if they so choose through a Regulation M filing. According to the announcement, this would allow investors to redeem shares promptly and at a fair price.
The next plan was to reduce the fees associated with the fund. Valkyrie wants a fee reduction of over 50% to comply with best industry practices. As such, it plans to lower the fee from 200 basis points to 75 basis points.
Finally, Valkyrie would like to reward redemptions of investor shares in both BTC and cash. The reasoning behind this was that it gives investors “more flexibility and choice when redeeming their shares”.
McClurg concludes the statement by asking for the statement to be examined. “We are committed to putting the interests of GBTC shareholders first and we have the experience and expertise to do so effectively,” said the co-founder.
The GBTC discount to NAV remains elevated, although there has been some recovery towards the end of 2022. It had peaked at 48.57% on December 16, but by the end of the day on Friday, December 30, the GBTC discount had fallen to 45.17%.
Featured image from Bloomberg, chart from TradingView.com
Source: Crypto News Deutsch