CoinShares acquires Valkyrie's ETF business

CoinShares’ global assets under management (AUM) increased to approximately $7.3 billion following the acquisition.

CoinShares, a European digital asset investment firm, has completed the acquisition of Valkyrie Funds LLC, including the sponsor rights to the firm’s spot Bitcoin exchange-traded funds (ETFs).

As part of the deal, CoinShares has also acquired the firm’s investment advisory business, Valkyrie Investments Inc., and the sponsor rights for its physically-backed Bitcoin ETF, the Valkyrie Bitcoin Fund ($BRRR), CoinShares announced on March 12.

The acquisition price will be settled at the end of a three-year earnout period based on Valkyrie’s financial results. The deal also puts Valkyrie’s other ETFs under CoinShares’ management, including the Valkyrie Bitcoin and Ether Strategy ETF ($BTF), the Valkyrie Bitcoin Miners ETF ($WGMI), and the Valkyrie Bitcoin Futures Leveraged Strategy ETF ($BTFX).

According to Jean-Marie Mognetti, the CEO of CoinShares, the U.S. is a critical market for global asset managers. Mognetti wrote:

“The Valkyrie acquisition is yet another step in our growth strategy with a special focus this time in the U.S. This acquisition brings an additional $530 million AUM to CoinShares, which makes it a top-line contributor from day one. More importantly, it broadens our product offerings, strengthens our innovation capacity, and increases by a factor of 15 our total addressable market.”

Following the acquisition, CoinShares will start rebranding Valkyrie and its products under its own ecosystem. CoinShares held an option to acquire Valkrie since November 2023. The acquisition is part of CoinShares’ plans to expand its asset management platform in the United States.

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Bitwise Bitcoin ETF joins the $2 billion club

The announcement comes during increased interest in Bitcoin ETFs, a day after Bitcoin breached a new all-time high of $71,415 on March 11.

The Bitwise Bitcoin ETF ($BITB) was the latest ETF to surpass $2 billion in Bitcoin holdings on March 11, as the fifth fund to surpass the milestone, according to Dune data. Grayscale’s Bitcoin Trust ETF ($GBTC) is still the largest, with $29 billion worth of Bitcoin under management.

If the growth of the past two weeks continues, ETFs are projected to absorb 8.98% of the BTC supply on a yearly basis. This could lead to a “sell-side liquidity crisis” by September if the institutional inflows were to continue, according to Ki Young Ju, founder and CEO of on-chain analytics platform CryptoQuant.

“Last week, spot ETFs saw netflows of +30K BTC. Known entities like exchanges and miners hold around 3M BTC, including 1.5M BTC by U.S. entities… At this rate, we’ll see a sell-side liquidity crisis within 6 months,” he said.

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