Valkyrie’s Two Crypto-focused Trusts Raise $73.6m

Two crypto-focused trusts owned by digital asset manager Valkyrie have raised $73.6 million.

One cryptocurrency trust, the Valkyrie Tron Trust, launched last year to offer accredited investors access to the TRX cryptocurrency.

According to an amended filing with the SEC, the fund has secured a $50 million investment fund from investors.

Another cryptocurrency trust is a new trust launched in May, Valkyrie Avalanche Trust, dedicated to providing investors with separate exposure to the Avalanche (AVAX) blockchain and the underlying cryptocurrency.

The report shows the trust has now raised nearly $24 million, slightly less than the $25 million Valkyrie said in May had raised for the then-newly announced trust.

Valkyrie spokesperson comments on the two cryptocurrencies trust fund that:

“Tron has gained significant traction because the Tron network continues to see continued transaction growth, including for stablecoins, and investors familiar with the Asia-Pacific region have started taking notice. Avalanche is also seeing increased adoption at a substantial rate, including earlier this week when KKR announced a deal with Securitize to tokenize a piece of a private equity fund on the Avalanche blockchain.”

Valkyrie Digital Assets was one of the first asset managers to launch a Bitcoin futures ETF in the U.S. with a very robust underlying trust portfolio.

These include, but are not limited to, the Valkyrie Bitcoin Trust, the Valkyrie Algorand Trust, the Valkyrie Polkadot Trust, the Valkyrie Dash Trust, and the Valkyrie TRON Trust. In addition to launching these funds based on the innovation embodied in cryptocurrencies and their underlying blockchains, they also float based on popular demand.

Valkyrie is knowns as an experienced Index manager whose Bitcoin futures ETF was approved by the U.S. Securities and Exchange Commission (SEC) last year.

In July, crypto asset manager Valkyrie launched a new financial investment product. The Tennessee-based company has announced that it is entering the venture capital arena with plans to raise a $30 million fund by investing in early-stage startups in Israel.

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Grayscale Contacts with SEC over the Securities Status of Three Trusts

Grayscale Investments, a subsidiary of the Digital Currency Group (DCG), has been in contact with the United States Securities and Exchange Commission (SEC) over the definition of the status of three of its established Trusts.


According to the reviewed filings first sighted by Coindesk, the contact between the regulator and the company is about its Horizen (ZEN), ZCash (ZEC), and Stellar Lumens (XLM) Trusts, respectively.

The alleged correspondence between both parties happened in both June and August. On one of the occasions, Grayscale acknowledged that the tokens under review “may currently be a security,” or they may be deemed as one by the relevant body in short to long term.

“The sponsor has been contacted by staff from the SEC’s Divisions of Corporation Finance and Enforcement concerning the sponsor’s securities law analysis of ZEC,” Grayscale said in its June and August filings regarding its ZEC trust. “The sponsor is in the process of responding to the SEC staff.” This exact position or language is also reflected in the company’s filings for its XLM and ZEN trusts, with the asset names changed to match each trust. 

The communication between the SEC and Grayscale is yet another known instance of interaction or inquiry with digital currency platforms as the regulator seeks to deepen its regulatory oversight of the broader industry.

The SEC recently named nine tokens that trade on the Coinbase Global Inc exchange platform as securities. This changed the narrative of the cryptocurrency trading outfit and maintained the claim that it has always abided by the necessary asset listing rules that conform to appropriate laws.

Getting in the crosshairs of the SEC might not speak well for a business venture, as any regulatory push that may ensue can be very costly. While not praying for a Ripple-related situation, Grayscale said in its June filing that the regulator has not disclosed the securities status for the tokens. This condition might have impacted its decision at the end of the day.

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DBS Provides Crypto for Trust Offerings

DBS Group announced Friday that the company has started offering trust services for cryptocurrencies, allowing their premium clients to include the emerging asset class in their succession plans. (16).jpg

Reuters reported Friday that the Singapore-based private bank’s trust subsidiary is offering their clients support for investing, storing and managing digital assets for cryptocurrencies. Bitcoin and Ether, the two largest cryptocurrencies, will be supported and included in clients’ wealth succession plans.

Lee Woon Shiu, Regional head of wealth planning and insurance solutions at DBS, said in a statement:

“International regulations and protocols are still nascent in the digital asset space, which could give rise to complications or unnecessary confusion if proper measures are not in a place to prevent them.”

DBS said that their clients are showing more interest by investigating digital assets. Clients are also concerned about confidentiality and taxation-related issues, which are listed as their top priority. The bank expects the new trend of crypto to become mainstream soon and is advising their clients to set up trust structures properly.

This is the latest measure from Southeast Asia’s largest bank, which launched a crypto exchange for institutional and other accredited investors late last year. 

Meanwhile, several other global banks are cautiously starting to offer crypto-related services, often to their high-value clients, drawn by the recent surge in price of Bitcoin and other cryptocurrencies.

In terms of crypto exchanges, Bitcoin has risen by more than 70% so far this year. Thailand has introduced a new verification approach for crypto exchange customers.

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Grayscale tops $50 billion: ‘Will soon pass world’s largest commodity ETF’

Major U.S. asset manager Grayscale has just surpassed $50 billion in cryptocurrency assets under management for the first time. Grayscale’s AUM is creeping ever closer to the $57 billion holdings of the largest commodity ETF.

The company has plans to convert into an ETF when regulations allow. 

If the ETF had been approved already, Grayscale would be the second-largest commodity ETF behind SPDR Gold Shares. GLD is a physically-backed gold exchange-traded fund (ETF) with listings on stock exchanges in the U.S., Mexico, Singapore, Japan, and Hong Kong.

Grayscale CEO Michael Sonnenshein tweeted that he believes the Grayscale Bitcoin Fund, or GBTC, is likely to surpass the GLD fund by market cap in a few months.

Grayscale provides cryptocurrency exposure to institutional investors and holds approximately 660,000 BTC in total representing 3.5% of Bitcoin’s 18.68 million circulating supply. Almost 655,000 of these are held in Grayscale’s Bitcoin Trust.

Grayscale doesn’t just deal in Bitcoin, with almost 20% of the company’s AUM spread across a dozen other cryptocurrencies including Ethereum ($7.4b), Litecoin ($405m), Ethereum Classic ($267m), and Bitcoin Cash ($234m). In the last month, five more trusts were created — Decentraland’s MANA ($18.6m), Livepeer ($13m), Filecoin ($7.7m), Basic Attention Token ($4.8m) and Chainlink ($4.5m).

The firm is already the largest U.S. digital asset manager by a large margin, with Pantera, the second-largest manager, holding only $4.3 billion, less than one-tenth of the $50 billion held by Grayscale.

Yesterday the asset manager announced a partnership with Time Magazine to produce an educational crypto videos series. The magazine also agreed to receive payment in Bitcoin and hold the digital asset on its balance sheet.


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Trust, That We Need More Of

(This article is part of a two-article series from Karo Zagorus. The previous article in the series can be found on in Volume 10 under the name “Trust, The Lack Of.”)

Fiat money has evolved into a disease which created an environment that seeped into the foundations of society. Last time, we looked at the direct effects of money, what it can create that self reinforces our environment into evil cycles that indirectly affect human trust. It is not the institutions’ and individuals’ goals to abuse our trust, their behavior is indirectly enabled and reinforced by the environment it is present in.

This problem directly affects cognition — we turn more selective with who we trust and how we form our connections. Social capital is required for a properly functioning society, and it is what is depleting today. Imagine social capital like energy in a mobile game that forces you to wait until it gets refilled over time. Now, imagine if people would operate the same way. It works exactly the same way, if you are out of it, you at least need some money to raise your time preference in order to refill your energy meter to continue doing activities. But it’s a bit too simplified that way, truth to be told, because it can create way too many consequences if it depletes.

Robert D. Putman, in his book titled “Bowling Alone: The Collapse And Revival Of American Community,” successfully shed light on why we have fewer friends. Although, it falls short of understanding the main cause: Paper money.

As society loses stored value, time preference rises, which then creates reinforcing cycles that deplete social capital and, by that, creates the perfect environment to dissolve trust. This simple process is what is going down right now in society, but it is not just trust that it is dissolving. It’s the very social fabric also.

In Japan, where the national debt-to-GDP ratio is over 260 percent, we can best observe the negative effects of societal loss of stored value playing out in full force. Although Japan is a more conservative society resistant to widespread change, we can see that it is not necessary to be socially liberal in order to be directly affected by it.

Japan is seeing record low levels of births and marriages and more individuals suffering from depression and suicides. It is a fact that, within Japan, there are over 1.1 million individuals who are suffering long term from acute social withdrawal (In Japanese this is known as “hikikomori”). Where sources claim that young and old individuals suffering from hikikomori are affected by numerous problems, the underlying cause can be easily reduced down to the fact that Japanese cultural phenomena have devolved to the point that its high time preference phenomena causes societal destruction.

It is possible to conclude that two factors can create high time preference with extremely similar effects (although they completely differ based on environmental factors), which are debt and inflation. (Literally, these factors stem from central banking.) Debt accelerates spending and robs individuals from savings and, therefore, the ability to have a safe and stable future. While inflation does the exact same, but robs individuals of their savings directly.

Although Japan’s case is very special because it is an extremely rich country that is at the pinnacle of technological advancement, the same negative effects of paper money on society will eventually surface in any society. (At this point, someone could claim that we could group the effects of social isolation to central banks. It could be possible to do that, but the problem is that the individuals controlling them might have interests that are based on false foundations — MBA, social science economics, basically — but the fact is that then we could also go all the way back to the main culprit of the whole system: John Maynard Keynes. A sound central banking policy based on hard money could be different, therefore we cannot blame these problems on the concept of a central bank alone. But I think I can also agree with the opinion that we should group them together.)

Another negative effect we see today is that we want to organize less and join fewer organizations because there is just no point to it. There is no point to voting anymore, just as there is no point to joining bowling leagues anymore. The need for chivalry has died long ago.

If you are a bitcoiner, you are within this environment and you have managed to get out of it somehow, by luck or education. However, deflation is not an immediate fix for our problem, because reverting neural synapses wired in by this disease is a long-term process. Miracles don’t happen, especially when your environment’s dangerous specter overshadows you.

As of today, many of us lack trust and faith in the system, and it is way beyond repair. The positive effects of bitcoin need to slowly override those of the negative system that surrounds us.

We can already observe some faint light at the end of the tunnel. Savings have been reintroduced into the hands of society. You can save money and the State is unable to influence your funds on the Bitcoin blockchain. Nobody can take your money away, and this creates economic stability that positively influences mental wellbeing. When you know that you have savings, and that you will be able to pay any and all unexpected expenses that might arise and that you have built the foundations of a prosperous future, things change.

You will certainly be less depressed and other emotions will overtake that feeling with higher intensity. You might feel more responsible for your future and this will eventually lead to excessive stress. (We have to be very careful with depression here, because some variants of it might be due to underlying mental conditions that a lowered time preference and reintroduction of savings will not solve at all.)

So, did we fix trust?

No. We certainly did not, since trust is certainly not broken. The process of how we form trust started to change thanks to Bitcoin.

So, what is going on exactly, then?

Bitcoin basically restored a long lost function of organization and paired aspects of it. Bitcoiners today actively seek to find and form stable connections based on the mutual understanding of their economic, societal, religious and political aspects. The sound basis has returned because now, connected participant individuals abide by an unwritten code of honor that sustains the fabric of trust within their realm. Individuals learned that now they have many things to lose if they remain inactive.

In a world of decay, where every aspect of the civilized norm slowly disappears to be replaced by a new normal, the only fix is if others band together to repair the broken system. Bitcoin was created to solve a problem, but it is fixing many because the underlying root cause that it is fixing leads to everything else. But the effect is so strong that Bitcoin alone cannot fix the problem, individuals must act as a self-help hotline, literally to bring about the function again, showing others that there can be life beyond credit cards and zero savings.

Let’s not beat around the bush.

Trust is not simply something like believing that your neighbour will not invade your home in the middle of the night because the Ledger leak made him think that you are a bitcoin millionaire (even if you are), but it is the basic foundation necessary to advance humanity through entrepreneurship, sound science and organization. Without trust, the whole world breaks down and we will be unable to progress. This is what the use of Bitcoin grants individuals: the chance to restart progress and create more trust through the rebuilding of social capital and economic stability.

(If you didn’t know, the underlying basic principle of enterprise is that of trust. Without it, business cannot extend and expand out of the family.)

If we inhibit trust, as the breakdown of social capital does because of the high time preference created by the loss of savings, it enables the processes that lead to the type of society that we are all now living in. It pushes individuals away from the system because the system itself is broken and they seek refuge in failed ideological promises, like that of Marxist socialism or communism.

Human organizations have now returned to the foundations. When I look around (basically, browse Twitter), clear aspects of rebuilding can be found. The average bitcoiner have more stable alliance-level relationships (built on the foundations of honor, trust and personal reputation) with individuals who are willing to take extreme risks to see through the revolutionary phase of Bitcoin. Though temporary, the fact that Bitcoin could create such an environment is notable. Bitcoin’s next phase is revolutionary, its users will change the world and no State actor can tell them to stop.

When I claim that chivalry has returned, it is for real. Some might argue that you have no friends if you Bitcoin, but this is an extremely flawed view. As we progress through the revolutionary phase, dangerous encounters could be on our doorstep that require the full-fledged cooperation of aligned individuals, similarly to how Medieval knights swore allegiance to God or to a brotherhood, or how many in the U.S. take the oath of allegiance.

Remember my writing about the importance of being neutral?

If you don’t stay true to your allies, you will lose every one of them.

By rebuilding the smallest elements of trust, you directly help Bitcoin fix the world. It is arguably evident that if we would, right now, give everyone bitcoin and everyone would use it beginning tomorrow, it would wield a shock effect that could disrupt society further and cause despair long term (this is because you haven’t solved high time preference and you haven’t solved other negative effects that could go nuclear because of a Bitcoin monetary standard) therefore, we need the processes that go on today to properly fix everything.

I cringe every time people say that “Bitcoin doesn’t need you,” because they are so wrong. Without the input and care of individuals who use the Bitcoin network, store value on it or organize around it politically, it would be completely meaningless in the current state of affairs of the world. (Bitcoin literally even pays you to proactively engage in revolutionary behavior because it needs you! There is no meaning in life without anyone to talk to or to print blocks for — Bitcoin simply does not want to remain lonely.)

Since social capital is now slowly being replenished (for some, it could already be replenished, based on the level of toxicity apparent on Twitter), these individuals should double down and keep engaging in building more of the trust that we need. Build not just groups, but build the basis of entrepreneurship and the foundations of the brave new world.

This is a guest post by Karo Zagorus. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.


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Miller Opportunity Trust Says It Could Invest Up To $300 Million In Grayscale’s Bitcoin Trust

Miller Opportunity Trust, a value fund founded and overseen by veteran American investor and hedge fund manager, Bill Miller, stated in a regulatory filing submitted to the U.S. Securities and Exchange Commission (SEC) that it is planning to invest in Bitcoin. Based on the filing, Miller Opportunity Trust may seek indirect exposure to Bitcoin through the investment into the Grayscale Bitcoin Trust.

The investment trust plans to invest 15% of its assets into Grayscale’s Bitcoin Trust. As of December 31, 2020, Miller Opportunity Trust holds $2.25 billion in assets under management. This means that the trust plans to indirectly invest more than $300 million dollars into Bitcoin through Grayscale’s Bitcoin Trust.

The Miller Opportunity Trust wrote in the filing with the US SEC that:

“The Fund may seek investment exposure to bitcoin indirectly by investing in the Grayscale Bitcoin Trust, an entity that holds bitcoin. The Grayscale Bitcoin Trust invests principally in bitcoin. The Fund will not make any additional investments in the Grayscale Bitcoin Trust if, as a result of the investment, its aggregate investment in bitcoin exposure would be more than 15% of its assets at the time of investment.”

The announcement comes at a time after Bill Miller told investors in a recent letter about Bitcoin’s potential as a good investment for maximizing profits.

Better Understanding of Risks

The skyrocketing Bitcoin price has gained widespread attention from media, individuals, institutions, and regulatory agencies. With significant price growth and volatility, the number of investors participates in the crypto market has been on the rise.  Although there are many options available to institutional investors to gain exposure to Bitcoin, the Grayscale Bitcoin Trust has become a popular approach.

The Miller Opportunity Trust is one of the several major investors indirectly channeling their funds into Bitcoin. While a huge number of institutional investors opt to put 10%-15% of their funds’ net worth indirectly into Bitcoin, the commitment is another milestone for the crypto market. An estimate of half a billion-dollar commitment indicates that several larger investors now understand the advantages and the risks associated with the inclusion of cryptocurrencies in their portfolios.

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Integrity should be a core criterion on our crypto list from the start. Of course, integrity begets integrity. Trust begets Trust. Attract the best, most genuine people you can, seriously. Attract real people who aren’t JUST here for quick bucks for ’emselves. 2021: year of real

Integrity should be a core criterion on our #crypto list from the start. Of course, integrity begets integrity. Trust begets Trust. Attract the best, most genuine people you can, seriously. Attract real people who aren’t JUST here for quick bucks for ’emselves. 2021: year of real


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Grayscale Bitcoin Trust Offers Public Access to BTC “Era of Digital Gold”

With Bitcoin back in the public eye after hitting a new all-time high last month and the BTC price gaining over 150% in 2020, Grayscale Bitcoin Trust is offering mainstream investors access to the newly proclaimed era of digital gold.

Bitcoin, Grayscale, BTC, Trust, Gold

The Bitcoin price has been on a tear this year, pushed to new heights by the growing institutional investment narrative that BTC has become an actual store of value and can be used to hedge against currency devaluation. As public interest peaks, Grayscale is seizing the opportunity in the hopes of offering retail and professional investors a route into the era of digital gold.

With a link to their Bitcoin trust and services, Grayscale posted on Twitter:

“Be bold in the era of #digitalgold with Grayscale Bitcoin Trust, your route into #Bitcoin investing. $#BTC”

The Bitcoin as a digital gold narrative is becoming more and more prevalent. According to Mike McGlone, Bloomberg Intelligence Senior Commodity Strategist whose recent report supports this position said on Twitter:

“In a World Gone Digital, #Bitcoin May Surpass #Gold — The past year has been a stepping stone for Bitcoin into the mainstream of investment portfolios and for the digital evolution of money, which should keep the benchmark crypto on an upward price trajectory in 2021.”

Is Bitcoin Digital Gold?

While there is growing consensus among institutional players like Microstrategy’s CEO Michael Saylor that Bitcoin can be a store of value, not everyone is convinced or quite as sure.

Banking giant Wells Fargo has, in the same breath, called Bitcoin this year’s top asset and labeled it a ‘speculative’ investment. In its report, Wells Fargo compares investing in crypto to the early days of the 1850’s gold rush – however, according to Gavin Smith, CEO of Panxora their research neglects various key facts about Bitcoin. Smith said: 

“In the same way that the gold market today bears no resemblance to the ‘gold rush’ mentality of the 1850s, the Bitcoin of today has become a store of value that is used in times when people fear currency devaluation.”

As reported by Blockchain. News, Tom Jessop, President of Fidelity Investments digital assets arm, said last Thursday that his firm still uses the word “potential” when describing volatile Bitcoin’s ability to act as a store of value, although many investors appear sold on the BTC as a safe haven narrative.

While the Panxora CEO Smith agrees that Bitcoin still displays high volatility, he believes BTC’s classification as a speculative instrument as been dismissed.

Smith said in an email to Blockchain.News:

“As recently as 2017 Bitcoin could be viewed largely as a speculative instrument but this is no longer the case. Bitcoin displays the high volatility which is characteristic of any emerging asset. But there is a growing acceptance among institutional investors that a strong use case exists for using Bitcoin alongside gold as a hedge against currency devaluation. This is evidenced by the growth of the Grayscale Trust and companies like Microstrategy parking a quarter of a billion dollars in bitcoin as part of their treasury management strategy.” 

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Bitcoin (BTC) $ 27,792.45 1.26%
Ethereum (ETH) $ 1,649.04 0.55%
Litecoin (LTC) $ 64.47 1.68%
Bitcoin Cash (BCH) $ 233.71 1.64%