Valkyrie Funds, an alternative finance firm focused on the digital asset ecosystem, has launched the Valkyrie Balance Sheet Opportunities ETF (VBB US) on Nasdaq.
Leah Wald, CEO at Valkyrie Funds.
The actively managed fund invests in public companies operating within the bitcoin ecosystem as well as firms with significant exposure to bitcoin on their balance sheets.
The fund does not invest directly in bitcoin or any other cryptocurrency.
According to a recent survey from the Financial Planning Association, more than 80% of US financial advisors have been asked about cryptocurrencies, yet many do not know how to effectively allocate clients to this asset class.
VBB offers a solution, providing indirect exposure to the world’s largest cryptocurrency while maintaining the liquidity, regulatory standards, and protections typically associated with ETFs.
The fund is managed by Steven McClurg, CIO of Valkyrie, with collaboration from Rafael Zayas and Ryan Dofflemeyer, both Senior Portfolio Managers at Vident Financial, the ETF’s sub-advisor. Valkyrie Funds is based in Nashville.
The fund invests in US-listed companies “with innovative balance sheets”, defined as those that directly or indirectly invest in, transact in, or otherwise have exposure to bitcoin. This may include bitcoin custodians, exchanges, and traders, as well as companies that have a portion of their assets accounted for by direct bitcoin holdings.
The fund may also invest up to 20% of its assets in companies that do not meet the innovative balance sheet criteria but otherwise operate in the bitcoin ecosystem. Eligible companies are bitcoin trading platforms, miners, digital wallet providers, companies that facilitate payments in bitcoin, and companies that provide other technology, equipment, or services to companies operating in the bitcoin ecosystem.
As of 7 January, the fund had 24 stocks with the most notable positions being MicroStrategy (14.2%), Block (10.4%), Tesla (10.3%), Coinbase Global (10.0%), and BTCS (5.4%).
It comes with an expense ratio of 0.75%.
Leah Wald, CEO at Valkyrie Funds, said: “Bitcoin and other digital assets are seeing increasing interest from all corners of the globe. Companies with exposure to bitcoin have read the tea leaves and decided to take action in an attempt to preserve their value, but also as another means to potentially generate more returns for shareholders in the decades to come.”
VBB is the second ETF from Valkyrie Funds following the October 2021 launch of the Valkyrie Bitcoin Strategy ETF (BTF US) which tracks cash-settled, front-month bitcoin futures contracts traded on the Chicago Mercantile Exchange. BTF comes with an expense ratio of 0.95%.