Valkyrie Proposes to Improve Grayscale Bitcoin Trust: NAV Redemptions & Lower Fees

• Valkyrie Investments has submitted a proposal to become the sponsor and manager of Grayscale’s Bitcoin Trust (GBTC).
• Valkyrie plans to offer orderly redemptions at net asset value (NAV), reduce GBTC fees, and offer redemptions in both Bitcoin and cash.
• Grayscale is attempting to convert GBTC into an ETF, and also looking at other possibilities such as a tender offer for up to 20% of outstanding shares.

Valkyrie Investments recently announced that it has submitted a proposal to become the sponsor and manager of Grayscale’s Bitcoin Trust (GBTC). GBTC is among the largest Bitcoin investment funds, valued at 643,572 BTC ($10.6 billion) at present. However, the fund is also in trouble, as GBTC was trading at 50% less than the value of the Bitcoin that it holds in December.

In efforts to improve upon Grayscale BTC, Valkyrie proposed to offer orderly redemptions at net asset value (NAV), allowing customers to withdraw their funds at a fair value without any issues. The company also aims to reduce GBTC fees and offer redemptions in both Bitcoin and cash. Moreover, Valkyrie is launching the Valkyrie Opportunistic Fund LP, which will take advantage of the discrepancy between GBTC and the NAV.

Grayscale, on the other hand, is attempting to convert GBTC into an ETF, in order to raise the price of the fund. The 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 Wall Street Journal reports.

Valkyrie noted today that it has a proven track record of successfully managing a Bitcoin fund, and said that its proposal is a significant improvement over the current management of GBTC. The company asked Grayscale to consider its proposal carefully. With both firms aiming to improve upon the operation of GBTC, it remains to be seen which of their plans will come to fruition.