CoinShares Gets Greenlight to Buy Valkyrie ETF Arm as It Expands Into North America

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Jimmy Aki

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Jimmy Aki

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Jimmy has nearly 10 years of experience as a journalist and writer in the blockchain industry. He has worked with well-known publications such as Bitcoin Magazine, CCN, and Blockonomi, covering news...

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November 16, 2023 14:52 EST

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Leading European digital asset investment firm CoinShares has announced its strategic acquisition of the Valkyrie Funds, a crypto exchange-traded fund (ETF) subsidiary of US-based Valkyrie Investments.

In a press release dated November 16, the CoinShares Group stated it obtained an exclusive option to buy Valkyrie Funds and all other crypto-backed funds, both actively traded and those in review by top government agencies.

Valkyrie Funds submitted an S-1 form to the US Securities and Exchange Commission (SEC) on June 21 for a spot Bitcoin ETF.

This was in a bid to float its own institutional-friendly Valkyrie Bitcoin Fund, a practice rapidly picking up pace amongst several legacy asset management firms.

With this recent acquisition by CoinShares, the European crypto asset investment company automatically inherits the Valkyrie Bitcoin Fund and reserves the exclusive right to launch other crypto-backed ETFs in the future.

However, the completion of the deal is contingent on CoinShares exercising its rights, with a deadline of March 31, 2024, as outlined in the official release.

So CoinShares now has exclusive right to acquire Valkyrie funds (until Q1 2024).

*right* – not *obligation*

Is this big news @JSeyff pic.twitter.com/dI8koICHTn

— Oktay Kavrak, CFA (@OKavrak) November 16, 2023

Speaking at the milestone event, CoinShares CEO Jean-Marie Mognetti emphasized the fragmented nature of the global crypto ETF market.

He noted that Europe has taken the lead, having already introduced such services eight years ahead of the United States.

The acquisition of Valkyrie Funds is seen as a strategic move to address this disparity and position the CoinShares Group for expansion into the US crypto ETF market.

Behind the scenes, CoinShares is systematically building up a significant digital asset-powered empire. Currently controlling $3.2 billion in assets under management (AUM), the firm launched its Hedge Fund Solutions on September 22, 2023.

Making a case for its intended rollout and its target audience, CoinShares said its Hedge Fund Solutions would provide an accessible medium for qualified US investors to tap into a range of private investment products, primarily surrounding digital assets.

To achieve this, CoinShares said it would create beta and alpha strategies that are crafted and customized to the unique needs of each institution operating in the North American nation.

To remain compliant, CoinShares Capital LLC, a wholly-owned subsidiary registered with the Financial Industry Regulatory Authority (FINRA), would help in rolling out the products of the crypto-centered hedge fund.

Crypto Passive Product in the US

Confirming this development, Valkyrie Funds announced its inclusion in the CoinShares family. The deal has also seen both parties involved sign a brand licensing agreement.

🚀 🎉 Big News! Valkyrie is set to join the @CoinSharesCo family! We're thrilled about this partnership, uniting our U.S. market insights with CoinShares' global expertise. Together, we're redefining digital asset investment in the U.S. and beyond!https://t.co/jiLOMIm8qR pic.twitter.com/s5URikl8Ci

— Valkyrie (@ValkyrieFunds) November 16, 2023

Given this, Valkyrie Investments will have a limited, revocable global license to use the CoinShares name in its pending S-1 filing with the US SEC during the option period.

In the event the Valkyrie Bitcoin Fund gets the nod from the SEC, Valkyrie Investments would then be permitted to incorporate the CoinShares name to ensure it properly registers in the SEC’s database.

According to CoinShares, this would represent its first advent into the US to provide a crypto-passive product to the teeming asset investors in the country.

Meanwhile, Valkyrie Funds would still operate as an independent entity until the CoinShares Group exercises the option.