CoinShares, a European investment firm specializing in digital assets, has successfully acquired Valkyrie Funds and gained the rights to sponsor the firm’s Bitcoin exchange-traded funds (ETFs). This includes the Valkyrie Bitcoin Fund, a physically-backed Bitcoin ETF, as well as Valkyrie Investments, the firm’s investment advisory business. CoinShares will also take over the management of Valkyrie’s other ETFs, such as the Valkyrie Bitcoin and Ether Strategy ETF, the Valkyrie Bitcoin Miners ETF, and the Valkyrie Bitcoin Futures Leveraged Strategy ETF.
According to CoinShares CEO Jean-Marie Mognetti, the acquisition of Valkyrie is a significant step in the company’s growth strategy, with a particular focus on expanding its presence in the United States. Mognetti highlighted that the acquisition brings an additional $530 million in assets under management (AUM) to CoinShares, making it a top contributor right from the start. Furthermore, he emphasized that the acquisition enhances CoinShares’ product offerings, strengthens its innovation capacity, and expands its total addressable market by a factor of 15.
Following the acquisition, CoinShares will rebrand Valkyrie and its products under its own ecosystem. The option to acquire Valkyrie has been held by CoinShares since November 2023, and this move is part of the company’s broader plan to grow its asset management platform in the United States.
The announcement comes at a time of heightened interest in Bitcoin ETFs, as Bitcoin recently reached a new all-time high of $71,415 on March 11. The Bitwise Bitcoin ETF became the fifth fund to surpass $2 billion in Bitcoin holdings on the same day, joining the ranks of other notable funds like Grayscale’s Bitcoin Trust ETF, which manages $29 billion worth of Bitcoin.
With the growing popularity of ETFs, it is projected that they will absorb approximately 8.98% of the Bitcoin supply on an annual basis if the current growth trend continues. This has raised concerns about a potential “sell-side liquidity crisis” by September, as institutional inflows into ETFs persist. Ki Young Ju, the founder and CEO of on-chain analytics platform CryptoQuant, warns that if spot ETFs continue to see significant net inflows, there could be a shortage of available Bitcoin for sale within the next six months.
In related news, Ethereum’s highly anticipated Dencun upgrade is set to launch in two days, which is expected to have significant implications for the cryptocurrency.