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Asset management firm Valkyrie has added digital asset trust company BitGo as a custodian for its recently launched spot Bitcoin exchange-traded fund (ETF).
In an 8-K filing to the United States Securities and Exchange Commission (SEC) on Feb. 1, the firm&nbsp;<a href="https://www.sec.gov/Archives/edgar/data/1841175/000199937124001339/brrr-8k_020124.htm" target="_blank" rel="noopener nofollow">stated</a>&nbsp;that the Valkyrie Bitcoin Fund and BitGo had entered into a custodial services agreement on Jan. 17, which sees BitGo provide services related to custody and safekeeping of the Valkyrie ETF’s Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>)&nbsp;holdings.
The firm, however, said it still plans to use Coinbase as a custodian and is understood to be the&nbsp;<a href="https://cointelegraph.com/learn/bitcoin-etfs-a-beginners-guide-to-exchange-traded-funds">spot Bitcoin ETF issuer</a>&nbsp;diversifying its digital asset custodians.
“The Sponsor anticipates utilizing the custodial services of both Coinbase and BitGo to custody the Trust’s bitcoin,” Valkyrie said.
<blockquote class="twitter-tweet">
 Excited to announce <a href="https://twitter.com/ValkyrieFunds?ref_src=twsrc%5Etfw">@ValkyrieFunds</a> has selected BitGo as their qualified custodian for its Bitcoin ETF ($BRRR). Providing secure Institutional access to digital assets together <a href="https://t.co/BgkkJZTHs9">https://t.co/BgkkJZTHs9</a>— BitGo (@BitGo) <a href="https://twitter.com/BitGo/status/1753158448274133314?ref_src=twsrc%5Etfw">February 1, 2024</a>
</blockquote> 
BitGo now acts as the custodian for two spot Bitcoin ETF issuers — the other being Hashdex — however, Coinbase acts as custodian for most of the spot Bitcoin ETFs launched in January. 
BitGo CEO Mike Belshe referred to custodian diversification as the “best approach” to mitigate risks associated with ETF custody in a Feb. 1 X post.
“This is a huge win for the industry,” he added.
<blockquote class="twitter-tweet">
 Valkyrie has added <a href="https://twitter.com/BitGo?ref_src=twsrc%5Etfw">@BitGo</a> as a custodian for their <a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#Bitcoin</a> ETF. This is a huge win for the industry as we partner to secure their assets. Kudos to <a href="https://twitter.com/ValkyrieFunds?ref_src=twsrc%5Etfw">@valkyriefunds</a>, <a href="https://twitter.com/LeahWald?ref_src=twsrc%5Etfw">@LeahWald</a> and <a href="https://twitter.com/stevenmcclurg?ref_src=twsrc%5Etfw">@stevenmcclurg</a> for leading the industry with the best approach to mitigate risk in ETF custody. <a href="https://t.co/MsSOtZGJ09">https://t.co/MsSOtZGJ09</a>— Mike Belshe (@mikebelshe) <a href="https://twitter.com/mikebelshe/status/1753163547880919194?ref_src=twsrc%5Etfw">February 1, 2024</a>
</blockquote> 
Bloomberg ETF analyst James Seyffart <a href="https://x.com/JSeyff/status/1753149123983798591" target="_blank" rel="noopener nofollow">said</a> he wouldn’t be surprised if other ETF issuers follow Valkyrie’s lead.
The Valkyrie spot Bitcoin ETF, tickered BRRR, holds $113.5 million in Bitcoin, <a href="https://x.com/BitMEXResearch/status/1752950388829962277" target="_blank" rel="noopener nofollow">according</a> to Jan. 31 data shared by BitMEX Research. It is the seventh-largest Bitcoin holder among spot Bitcoin ETF issuers.
Meanwhile, BlackRock and Fidelity lead the way among new Bitcoin ETF issuers, with $2.83 billion and $2.36 billion in Bitcoin holdings, respectively.
Related: <a href="https://cointelegraph.com/news/wall-street-grayscale-bitcoin-etf">Wall Street’s new asset class: Will Grayscale survive the Bitcoin ETF era?</a>
The 10 spot Bitcoin ETF issuers have been locked in a marketing and <a href="https://cointelegraph.com/news/spot-bitcoin-etf-fee-war-begins-issuers-amend-s-1-filings-with-lower-sponsor-fees">fee war for months</a>.
On Jan. 29, Invesco and Galaxy&nbsp;<a href="https://www.sec.gov/Archives/edgar/data/1855781/000119312524018212/d721311dex991.htm" target="_blank" rel="noopener nofollow">lowered</a> their management fees from 0.39% to 0.25%. BlackRock and ARK 21Shares also <a href="https://cointelegraph.com/news/spot-bitcoin-etf-issuers-file-s1-filings-as-expected">cut their management fees</a> before their spot Bitcoin ETFs were eventually approved.
Grayscale Investments, which converted its Bitcoin trust into a spot ETF form, currently sports the largest management fee of 1.5%.
The spot Bitcoin ETFs launched on Jan. 11 after the SEC gave the green light on Jan. 10.
Magazine: <a href="https://cointelegraph.com/magazine/bitcoin-etf-guru-eric-balchunas-last-laugh-doubters-x-hall-of-flame/">Bitcoin ETF guru Eric Balchunas has the last laugh at doubters: X Hall of Flame</a>

Valkyrie adds second custodian, BitGo, to its ‘BRRR’ Bitcoin ETF

Cointelegraph

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