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Valkyrie has become the first spot Bitcoin ETF (exchange-traded fund) to diversify the custody of its coins by entering into an agreement with BitGo, while still using Coinbase.
Valkyrie is making a strategic move to strengthen the security infrastructure of its spot Bitcoin ETF by working with multiple custody providers.
Through the collaboration with BitGo, the digital asset investment firm aims to ensure the safety of their Bitcoin holdings by diversifying funds that were all previously held by Coinbase. Greater security may appeal to some customers.
JUST IN: ???? Valkyrie becomes first spot #Bitcoin ETF to diversify the custody of their coins.
Their #BTC will now be held with BITGO and Coinbase. pic.twitter.com/eKOPxCJgwb
— Bitcoin Magazine (@BitcoinMagazine) February 1, 2024
The agreement between BitGo and Valkyrie commenced on Jan. 17, according to a Feb. 1 filing by the U.S. Securities and Exchange Commission (SEC).
A Positive Change In Trend For Bitcoin ETFs
Valkyrie’s latest diversification move could be in anticipation of large inflows into spot Bitcoin ETFs that went live on Jan. 11.
Since the first day these investment products started trading in the US, the outflows of Grayscale’s converted Bitcoin Trust (GBTC) overshadowed the inflows of the newly-launched ETFs.
On Jan. 29, BlackRock’s IBIT and Fidelity’s Wise Origin Bitcoin Fund (FBTC) each registered inflows that exceeded the outflows recorded by GBTC, according to data from BitMEX.
Fidelity’s FBTC was the best performer on the day and recorded $208 million inflows. BlackRock saw $198 million of capital enter its fund on the same day. FBTC, on the other hand, recorded outflows of $192 million.
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