The state of the Grayscale Bitcoin Trust (GBTC), the largest BTC trust in the world, has raised concerns among investors in the space. With such a deep discount to net asset value (NAV), there have been discussions about where the fund will go from here and whether it will be in trouble. Valkyrie Investments is now joining the conversation, but is taking a completely unexpected path.
Valkyrie wants the grayscale Bitcoin TRUST
In a statement which was released on December 28, Valkyrie Investments co-founder and CIO Steven McClurg revealed the company’s interest in taking over management of Grayscale Bitcoin Trust. The statement highlights the unique challenges facing the GBTC and envisions the Valkyrie team as best placed to manage the fund.
It points to its experience managing its own bitcoin fund, which it says has operated with daily liquidity since its launch a year ago. In addition, it also touts its experience with its multiple listed BTC ETFs launched 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 read. In light of recent events involving Grayscale and its family of affiliates, it is 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, the “Valkyrie Opportunistic Fund, LP,” which it says was created to help investors take advantage of the GBTC discount to NAV. “We are very interested in realizing the true value of the 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 improve the management of the Grayscale bitcoin trust if it were to take over. These were divided into three points.
The first was that it plans to facilitate orderly redemptions for investors at NAV when they choose through a Regulation M filing. According to the statement, this would allow investors to buy back shares without delay and at a fair price.
Next, the plan was to reduce the fees associated with the fund. Valkyrie wants a reduction of more than 50% in compensation to be in line with industry best practice. As such, it plans to reduce the fee from 200 basis points to 75 basis points.
Last but not least is the fact that Valkyrie wants to honor investor share buybacks in both BTC and cash. The reasoning behind this was that it believes it gives investors “more flexibility and choice when it comes to redeeming their shares.”
McClurg closes the statement with a call for consideration. “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 high despite some recovery recorded as 2022 drew to a close. It reached a high of 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
