CoinShares sets its sights on the world with the acquisition of US-based Valkyrie

Wednesday, March 13, 2024

In addition to having a Bitcoin Spot ETF in the US thanks to the acquisition of fund manager Valkyrie, CoinShares will be able to offer an expanded range of regulated products, enabling US investors to gain exposure to the crypto industry.

CoinShares is strengthening its presence in the United States. After officially announcing the securing of a call option in mid-November, one of Europe's largest crypto asset managers completed the acquisition of Valkyrie on Tuesday. The latter launched a Bitcoin Spot ETF in the US on 11 January, similar to BlackRock's.

With this acquisition, CoinShares now has the seventh largest US Bitcoin Spot ETF, with more than $350 million in assets under management. Founded in 2014, CoinShares now offers around 20 regulated crypto products (mainly ETNs and ETCs) in Europe, now totalling $7.3 billion in assets under management.

Strengthening presence in the US

In reality, although Bitcoin Spot ETFs are very much in vogue at the moment, they are only loss leaders at the moment.

"Due to very low management fees and high custody and transaction costs, asset managers are getting little revenue from Bitcoin Spot ETFs at the moment," Jean-Marie Mognetti, CEO of CoinShares, tells The Big Whale. "However, the acquisition of Valkyrie will enable us to offer US investors a wide range of innovative products to gain exposure to this new asset class," he adds.

Thanks to Valkyrie's licences in the US, CoinShares will be able to offer investment advice as well as active management via ETFs, among other services.

One of the products that has contributed to Valkyrie's notoriety is WGMI (an acronym for "We Gonna Make It", popular in crypto culture), which is an ETF for active management and exposure to the bitcoin mining industry. In 2023, it had the best performance of any ETF in the US (+235.6%).

Becoming a global player

In late September, CoinShares relaunched its crypto hedge fund business with two funds, Bitcoin and Ethereum, available for now only in the US and UK.

"Ultimately, we want to become a global player by offering a complete range worthy of a traditional asset manager, but applied to crypto", is the ambition of Jean-Marie Mognetti, who is also considering positioning himself in Asia.

This analysis is not investment advice. It has been prepared without taking into account your personal situation, particularly your financial situation, risk profile, and investment objectives.

Before investing in any product, investors should fully understand the risks involved and consult their own legal, tax, financial, and accounting advisors.

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