Valkyrie Proposes Changes to Grayscale’s Bitcoin Trust: Redemption, Lower Fees & More

• Valkyrie Investments has proposed to become the sponsor and manager of Grayscale’s Bitcoin Trust (GBTC).
• The company aims to offer orderly redemptions at net asset value (NAV), reduce GBTC fees, and offer redemptions in both Bitcoin and cash.
• Valkyrie has also launched the Valkyrie Opportunistic Fund LP which will take advantage of the discrepancy between GBTC and the NAV.

Valkyrie Investments recently announced in a statement that it has submitted a proposal to become the sponsor and manager of Grayscale’s Bitcoin Trust (GBTC). The news comes at a time when GBTC is facing difficulty in the marketplace, trading at 50% less than the value of Bitcoin that it holds. As a result, Valkyrie is aiming to improve the current operations of GBTC with a variety of changes.

To begin, Valkyrie is proposing to offer orderly redemptions at net asset value (NAV). This would allow customers to withdraw their funds at a fair value without any issues, thus providing greater liquidity and transparency in the market. In addition, Valkyrie is looking to reduce GBTC fees in order to further improve the fund’s attractiveness. On top of that, the company is proposing to offer redemptions in both Bitcoin and cash, allowing investors to choose the asset they would like to receive when redeeming their GBTC shares.

Valkyrie is also launching the Valkyrie Opportunistic Fund LP, which will take advantage of the discrepancy between GBTC and the NAV. The fund will look to capitalize on the current situation, allowing investors to benefit from the mispricing of GBTC.

In its statement, Valkyrie asked Grayscale to “consider it carefully” and suggested that its proposal is a “significant improvement” over current management of GBTC. Grayscale, however, has its own plans. The firm intends to convert GBTC into an ETF to raise the price of the fund, though its past attempts to do so have failed due to rejections from the U.S. SEC. Grayscale has also suggested other possibilities, including a tender offer for up to 20% of outstanding shares, according to recent WSJ reports.

As the two firms go back and forth in their attempts to improve the operations of GBTC, investors are eagerly awaiting the outcome. With Valkyrie’s proposal, investors will be able to benefit from the improved liquidity and reduced fees, while Grayscale’s potential conversions may help the fund reach a higher price. It remains to be seen which of these approaches will prevail, but both firms’ proposals offer compelling opportunities for investors.