Valkyrie Bitcoin ETF Gears Up For Wednesday Launch; CIO Foresees Massive $4-5B Inflows

As the January 10th deadline approaches for potential approval of the Bitcoin ETF applications by the US Securities and Exchange Commission (SEC), Valkyrie Investments co-founder and CIO Steven McClurg has expressed optimism for the entire crypto community. 

Valkyrie Investments plans to launch its spot Bitcoin ETF, named Valkyrie Bitcoin Fund, with the ticker BRRR. McClurg expects the SEC to deem the ETFs effective at the close of business on Wednesday, with trading commencing on Thursday morning. 

This development has sparked expectations of substantial investor funds flowing into Valkyrie’s ETF and the broader Bitcoin market.

Valkyrie’s Confidence In Bitcoin ETF Unfazed

In a statement to The Block, McClurg predicted that Valkyrie’s fund could see inflows of between $200 million and $400 million upon the ETF’s launch. 

Furthermore, McClurg suggested that the overall market could witness $4-5 billion inflows over the first few weeks. 

McClurg believes that retail investors and financial advisors will likely be the initial participants, with the possibility of outflows from Grayscale’s Bitcoin Trust (GBTC). He notes that financial advisors typically require a track record of two to three years before recommending new financial products to their clients.

Notably, while most Bitcoin ETF issuers have listed Coinbase as their custodian, McClurg does not view the ongoing SEC lawsuit against Coinbase as an existential threat. 

McClurg compares it to the common experience of financial firms facing SEC lawsuits and investigations. McClurg points out that the custody side of Coinbase’s business, which is relevant to the ETFs, remains unaffected, while the SEC complaints primarily target the consumer-exchange side.

Intense Fee Competition 

As reported by Bitcoinist, the competition among issuers for the spot Bitcoin ETF has intensified, leading companies to compete fiercely by offering the lowest possible fees.

It was reported on Monday morning that 11 issuers had proposed fees in their updated filings with the SEC, ranging from 0.24% to 1.5%, with Valkyrie offering 0.8%.

McClurg acknowledges that profitability may not be immediate for such products despite the low fees. He explains that ETFs typically operate at a loss in the early stages and become profitable later. 

Valkyrie, however, expects its ETF to become profitable within the first year of trading, showcasing its long-term commitment to the ETF business.

Overall, Valkyrie Investments, led by Steven McClurg, is optimistic about the SEC’s potential approval of Bitcoin ETFs. With expectations of the ETFs becoming effective and trading commencing in the coming days, Valkyrie anticipates significant investor inflows, potentially reaching hundreds of millions of dollars. 

Featured image from Shutterstock, chart from TradingView.com