Bitcoin

CoinShares Completes Acquisition of Valkyrie’s ETF Business, Expands US Presence

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European investment giant CoinShares has completed the final steps to acquire Valkyrie’s exchange-traded fund (ETF) business, according to a press release published on Tuesday. With this move, CoinShares aims to expand its footprint in the U.S. ETF market.

The latest acquisition is set to expand Coinshares’ footprint in the U.S.

The fresh acquisition grants CoinShares sponsors rights to Valkyrie’s spot Bitcoin fund (BRRR). This move also adds nearly Valkyrie’s $530 million of assets under management (AUM) to CoinShares’s AUM, totaling the fund to $7.3 billion as of March 11.


Big Money Chasing Bitcoin ETFs

Valkyrie revealed CoinShares’ plan to acquire Valkyrie’s ETF business in November last year. The asset management firm said in a post on X (formerly Twitter) that CoinShares won the option to acquire 100% of Valkyrie Investments’ ETF, which was participating in the spot Bitcoin ETF race, alongside other Wall Street giants like BlackRock, Franklin Templeton, and ARK Invest.

Several spot Bitcoin ETFs were approved for trading in Europe at the time of consideration, but ETF providers were yet to make headway with the US Securities and Exchange Commission (SEC).

Following the US regulatory approval of several spot Bitcoin ETFs on January 10, CoinShares confirmed it then exercised the option to acquire Valkyrie’s ETF. The announcement came on the first ETF trading day.

A press release last November said that Valkyrie Investments would use the CoinShares name to mark CoinShares’ first crypto product in the US market “should the SEC approve the Valkyrie Bitcoin Fund.”

At that time, observers believed that if the US SEC greenlighted spot Bitcoin funds, the deal would not only positively impact the crypto industry but also benefit CoinShare’s reputation.

CoinShares’ Head of Asset Management, Frank Spiteri, shared the company’s vision and reiterated its commitment.

To wit,

“As Europe’s leading investment company specializing in digital assets, CoinShares has consistently demonstrated trust and reliability with its crypto products and services since 2014.” Spiteri noted. “We are committed to guiding them through this dynamic journey, which is supported by our seasoned research team and innovative solutions. Our promise is to be a trusted partner in navigating the complexities of digital assets.”


Bitcoin Gets The Nod, Others On Hold

With the dust now settled for spot Bitcoin ETFs, the spotlight is now on other crypto-related ETFs; the top name is Ethereum. So far, eight asset managers are lining up in anticipation of the SEC’s decision in May.

However, as the due date approaches, there remains no sign that the securities regulators will give them a nod. SEC Chair Gary Gensler’s responses to other crypto ETF questions in his recent interviews were also vague.

Meanwhile, Gensler has maintained his skepticism toward crypto, saying that only spot ETFs are allowed for Bitcoin while the only cryptocurrency is considered a commodity.

According to Gensler, since Ethereum switched to the Proof-of-Stake mechanism, it has possessed security properties. The SEC has listed up to 52 tokens as securities in a series of lawsuits throughout 2023.

For the above reasons, Bloomberg ETF analysts Eric Balchunas and James Seyffart have reduced their estimate for an Ethereum spot ETF approval in May to just 35%. Previously, Balchunas predicted a 70% chance of an Ethereum spot ETF being approved in May, while Seyffart gave an estimate of 60-65%.

However, the executive suggests that the SEC will likely give more signals in the coming weeks, similarly to what they did in the days leading up to the January deadline.

“If we don’t start seeing those signs and hearing those reports as the May 23 deadline approaches, that silence will speak volumes,” said Chervinsky.

According to Variant Foundation’s chief legal officer Jake Chervinsky, there is “zero” chance of a spot Ethereum ETF being approved this year. Chervinsky stated that the general sentiment in the market right is overestimating the chances of approval.


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