The state of Grayscale Bitcoin Trust (GBTC), the world’s largest BTC trust, has caused concern among investors in the space. With a large discount to net asset value (NAV), there has been discussion about where the funds go from here and if there are problems. Valkyrie Investments has now joined the conversation but is taking an unexpected route.
Valkyrie wants The Grayscale Bitcoin TRUST
In a statement released on December 28, co-founder and CIO of Valkyrie Investments Steven McClurg revealed the company’s interest in taking over the management of Grayscale Bitcoin Trust. The statement highlights the unique challenges GBTC faces and presents the Valkyrie team as best placed to manage the fund.
It refers to his experience managing his own bitcoin fund, which he says has been operating with daily liquidity since launching a year ago. In addition, it also provides experience with several publicly traded BTC ETFs launching in 2021 which is a good reason why this is a good fit.
“We recognize that Grayscale has played an important role in the development and growth of the bitcoin ecosystem with the launch of GBTC, and we appreciate the team and the work they have done,” the statement said. However, in light of recent events involving Grayscale and its family of affiliated companies, it’s time for a change. Valkyrie is the best company to manage GBTC to ensure investors are treated fairly.
The company also announced a new fund called “Valkyrie Opportunistic Fund, LP” created to help investors take advantage of GBTC’s discount to NAV. “We are very interested in realizing the true underlying value of 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
Roadmap to Success
Valkyrie’s statement also included plans to improve management of Grayscale’s bitcoin trust if it were to take over. It is divided into three points.
The first plan is to facilitate orderly redemption for investors at NAV when they go through Regulation M filing. According to the statement, this will allow investors to exchange shares without delay and at the same price.
Next is a plan to lower the fees associated with the fund. Valkyrie wants to reduce fees by more than 50% in line with industry best practices. So, the plan will reduce the cost from 200 basis points to 75 basis points.
Last but not least Valkyrie wants to honor investors’ share redemptions in BTC and cash. The reason is that it believes it gives investors “greater flexibility and choice when redeeming shares.”
McClurg closed his statement by asking that the statement be considered. “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.
GBTC’s discount to NAV remains high even though some recovery is noted as 2022 approaches. It reached a high of 48.57% on December 16 but by the end of Friday, December 30, the GBTC discount had dropped to 45.17%.
Options images from Bloomberg, charts from TradingView.com