Investment firm Valkyrie has released a few proposals for the crypto industry’s largest fund Grayscale Bitcoin Trust (GBTC) to increase the latter’s current management.
Valkyrie Investment is developing a strategy to become the sponsor and manager of GBTC. In accordance, the Nashville-headquartered asset management firm announced the launch of the Valkyrie Opportunistic Fund.
In a letter published on the Valkyrie website, Steven McClurg co-founder and CIO of the firm said;
“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 that they have done. However, in light of recent events involving Grayscale and its family of affiliated companies, it is time for a change. Valkyrie is the best company to manage GBTC to ensure its investors are treated fairly.”
Valkyrie plans to utilize the current troubles that the fund is experiencing and the huge discount to become the new caretaker of the $10.5 billion worth of GBTC.
According to the firm, it would be expanding its GBTC holdings to show Grayscale the real value that the underlying Bitcoin (BTC) holds for investors. It seems like an impossible feat considering that GBTC has over $10 billion in assets under management (AUM) while Valkyrie has only about $180 million.
Valkyrie to Run the Grayscale Bitcoin Trust
As part of its proposal, Valkyrie wants to facilitate orderly GBTC redemptions at net asset value (NAV).
Interested investors will be able to participate in this through a Regulation M filing and in the end, they can access their assets at a moderate price. Secondly, instead of the regular 200 basis points, Valkyrie is proposing a reduction to 75 basis points. The asset manager believes that this will be the most equitable level for the fees.
Finally, the Valkyrie proposal considers permitting investors to redeem assets in BTC and cash.
Amidst all these, Grayscale is still experiencing some difficulties which it believes were contributed by the United States Securities and Exchange Commission (SEC) emphasis on its reason for refusing the Grayscale Investment’s application to convert GBTC into a spot bitcoin ETF.
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