The cryptocurrency industry is constantly evolving, and in recent news, we’re seeing signs of consolidation among some of the major players in the digital asset space. In a story that broke last week, European digital asset giant CoinShares secured an option to purchase key parts of rival ETF provider Valkyrie Investments. Let’s take a deeper look at what this means.
What’s the deal?
Through multiple reports, we learned that CoinShares obtained an exclusive option to acquire Valkyrie Funds, the investment advisory division of Alabama-based Valkyrie Investments. This unit focuses on developing cryptocurrency exchange-traded funds (ETFs).
CoinShares will also take over any rights associated with Valkyrie’s pending applications like the Valkyrie Bitcoin Fund, which aims to be the first U.S. ETF tracking the price of Bitcoin (BTC). BTC is the largest cryptocurrency by market cap and first blockchain-based digital asset.
The option period lasts until March 31, 2024, giving CoinShares time to mull the acquisition. In the meantime, Valkyrie will continue operating independently. But if executed, the deal would expand CoinShares’ crypto offerings – particularly its ability to launch ETFs stateside.
Aiming for the Lucrative U.S. ETF Market
With the global ETF industry topping $8 trillion in assets, it’s no surprise CoinShares CEO Jean-Marie Mognetti sees this deal accelerating the firm’s goals in the U.S. Though Europe has led the way in crypto ETF development since 2015, the American market is tipped to explode if regulators approve long-awaited Bitcoin products.
As Mognetti told investors, fragmented regulations between regions have created challenges but also opportunities. By acquiring Valkyrie’s platform, CoinShares aims to capitalize as the U.S. market catches up to its overseas counterparts. Their brand licensing agreement takes it a step further, allowing Valkyrie to leverage the CoinShares name if the Bitcoin ETF launches.
Clearly, getting a piece of the lucrative American ETF pie was a big motivator here. With over $3 billion in assets under management already, CoinShares is making strategic moves to solidify its position as a digital asset powerhouse on a global scale.
What’s Next for Crypto ETFs?
With multiple crypto ETF applications still pending before the SEC, the race to launch the first U.S. Bitcoin product remains a intriguing subplot in the blockchain industry. CoinShares acquiring Valkyrie’s operation suggests major players think approval may finally be on the horizon.
Only time will tell if 2023 is the year when crypto ETF floodgates open stateside. But deals like this show top firms are preparing for that scenario. The ETF vehicle could be pivotal for bringing new waves of institutional investors into the cryptocurrency market, further boosting adoption.
While the particulars of this agreement can seem complex, the overarching takeaway is simple – consolidation is on going as leaders like CoinShares get ready for cryptocurrency’s next phase of growth. Be sure to follow EXEcrypto for the latest updates on crypto news, ETF developments, and more big stories emerging from this fast-moving industry.