Valkyrie is the first spot Bitcoin ETF issuer to utilize two separate cryptocurrency custodians for its funds, thanks to its deal with BitGo.
BitGo provides custody services for Valkyrie’s Bitcoin Fund (BRRR), safely custody and storing a portion of native Bitcoin (BTC) in the company’s exchange-traded product. Valkyrie and BitGo reached an agreement on January 17, but did not file it with the U.S. Securities and Exchange Commission (SEC) until February 1.
This strategy diversifies Valkyrie’s spot BTC ETF by spreading risk across multiple cryptocurrency custodians, reducing single points of failure and enhancing the safety of the fund. Other issuers may eventually chart a similar course amid competition among asset managers.
Issuers raced to win over market participants and investors before and after the SEC approved a spot Bitcoin ETF on Jan. 10. Fees have been a major talking point for this fund. Some issuers have even waived fees for up to six months.
Initially, Valkyrie boasted one of the highest fees at 0.8%, but the issuer worked with BlackRock and Fidelity to reduce its fees to 0.25%. However, the Valkyrie Bitcoin ETF recorded much lower trading volume than its Wall Street heavyweights.
BlackRock became the first fund to outtrade Grayscale’s GBTC, following billions of dollars outflow from the giant fund over two weeks.