CoinShares, a leading European investment firm specializing in digital assets, has completed the acquisition of Valkyrie Funds. This strategic move includes the sponsorship rights to Valkyrie’s Bitcoin Exchange Traded Funds (ETFs), as well as Valkyrie Investments, the company’s investment advisory arm. The agreement was publicly announced on March 12.

Important step for CoinShares

The financial details of the transaction are linked to a three-year earn-out period, with the final acquisition price dependent on Valkyrie’s financial performance. This acquisition also means that CoinShares will now take over management of other Valkyrie products, including several specialty ETFs such as the Valkyrie Bitcoin and Ether Strategy ETF, the Valkyrie Bitcoin Miners ETF, and the Valkyrie Bitcoin Futures Leveraged Strategy ETF.

Jean-Marie Mognetti, CEO of CoinShares, emphasized the importance of the US market for global asset managers. “This acquisition is an important step forward in our strategy to strengthen our presence in the United States. It not only adds $530 million in assets under management (AUM) to our portfolio, but also expands our product offering, enhances our innovation capabilities and significantly expands our overall market reach.”

Repositioning product offering

As part of the integration plans, CoinShares will reposition Valkyrie and its product offering within its own brand ecosystem. This move comes at a time when interest in Bitcoin ETFs is surging, especially after Bitcoin’s recent price surge, which hit a new all-time high of $71,415 on March 11.

The acquisition follows CoinShares’ strategic plans to expand its asset management platform in the US, with an option to acquire Valkyrie since November 2023. This move coincides with a period of growing popularity and adoption of Bitcoin ETFs, with funds such as the Bitwise Bitcoin ETF and the Grayscale Bitcoin Trust ETF reaching notable milestones in terms of Bitcoin assets under management.

Warnings of possible liquidity shortages

However, experts warn of possible liquidity shortages in the sales market if the current inflow of institutional investments continues. According to Ki Young Ju, CEO of CryptoQuant, the continued growth could lead to a liquidity crisis within six months, given the recent net inflows into spot ETFs and the amount of Bitcoin held by well-known entities.

With this significant expansion of CoinShares’ portfolio and the increasing interest in Bitcoin ETFs, a new chapter is emerging in the evolution of the digital asset market, with potential implications for Bitcoin’s liquidity and availability in the medium term.


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