Valkyrie Is Digging For Bitcoin Mining ETF
Crypto asset firm Valkyrie Investments has just submitted filings with the SEC to list a Bitcoin mining-focused exchange-traded fund on the Nasdaq. Valkyrie’s proposed ETF would invest a minimum of 80% of its net funds into stocks of domestic and foreign companies that generate at least 50% of their revenue from Bitcoin mining and related operations including the production of specialized mining chips, hardware, and software to support the industry.
By Andrew Senior
January 27th, 2022
The Valkyrie team cut their teeth in traditional asset management with backgrounds in building, launching, and scaling financial products with major financial firms. They now aim to become the experts across the new world of digital assets.
Valkyrie has said it will also strongly consider the environmental, social and governance (ESG) impacts of companies when selecting stocks for the fund’s portfolio with the aim of investing most of the funds assets in miners that rely mostly on renewable or clean energy sources and make positive ethical changes. Valkyrie will allocate at least 80% of the fund’s net assets to companies that use at least 50% renewable or clean energy for their mining activities.
Ever since the SEC decided to take a hardened stance on approving applications for physical or spot Bitcoin ETFs, asset managers and investment firms have developed products offering indirect exposure to the cryptocurrency market, including Bitcoin futures ETFs, crypto company stocks, or ETFs that invest in them.
Like other crypto ETFs, the Valkyrie Bitcoin Miners offering will have no direct or indirect investments in Bitcoin, related derivatives, investment funds, or trusts that hold the asset. Instead, if approved, the fund will be an actively managed vehicle focused on purchasing stocks of Bitcoin miners or crypto-mining equipment manufacturers and will charge a 0.75% annual management fee.
If the SEC approves the fund, Valkyrie’s new ETF will provide investors with a diversified, direct exposure to the Bitcoin mining industry. Yet, this isn’t Valkyrie’s first crypto-related ETF. Last October, Valkyrie became the third firm to launch a Bitcoin futures ETF, following ProShares and VanEck. A month later, Valkyrie also launched a $100 million DeFi hedge fund, providing investors with exposure to more than 24 cryptocurrencies on more than 13 blockchains.
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