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Valkyrie Investments is working to become the new sponsor and administrator of the Grayscale Bitcoin Trust, which is arguably the largest digital currency fund ever.
Valkyrie Investments Wants Bigger Role in Grayscale Environment
Based in Nashville, Tennessee, Valkyrie is tasked with managing $180 million worth of assets. In late December, the company announced what it calls the Valkyrie Opportunistic Fund, which will take advantage of discounts offered through Grayscale Investments. By doing so, Valkyrie will increase its bitcoin holdings in the fund so as to realize the full value of the bitcoins. It will also pursue additional bitcoin and digital currency opportunities on the behalf of its customers.
In a statement, Steven McClurg – co-founder and CIO of Valkyrie Investments – said:
We understand that Grayscale has played a critical 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 put in. However, [due to] With recent events involving Grayscale and its affiliated family of companies, it is time for a change. Valkyrie is the best company to manage GBTC to ensure its investors are treated fairly.
While Valkyrie is poised to earn more bitcoin through Grayscale, how much control the company will have over future maneuvers is questionable given Grayscale’s current business model. The company has made it clear that none of the shareholders influence management protocol, nor do they have voting rights in the company. In addition, all changes or maneuvers can only be followed up unless there is a majority decision regarding the shares. This means 50 percent or more.
Currently, Grayscale’s stock is trading about 50 percent lower than the unit price of bitcoins held by the company. This makes sense in a lot of ways considering how low bitcoin has fallen in recent months, and companies that tie themselves directly to BTC – like MicroStrategy and Coinbase – haven’t had it easy, because when bitcoin falls, their stock usually goes down too. .
To say 2022 was a bad year for bitcoin and its many altcoin cousins would be a huge understatement. BTC is down more than 70 percent from an all-time high of around $68,000 per unit, reached in November 2021. From there, the currency suffered a long string of losses that caused it to fall to a mid-$16,000 range before the end of 2022.
Rough Patch for Both Entities?
Grayscale worked hard last year to become a kind of exchange-traded fund based on bitcoin, although this idea was (surprisingly) rejected by the Securities and Exchange Commission (SEC). Grayscale has since filed a lawsuit against the agency to give himself a fighting chance.
Valkyrie has been around for a little over two years, first opening its doors for business in January 2021.
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