Valkyrie, a prominent provider of spot bitcoin exchange-traded funds (ETFs) in the U.S., has taken a significant step by appointing BitGo as the second custodian for its Bitcoin Fund (BRRR), marking the first instance of diversification in custody for ETF providers.
The digital asset investment firm’s decision to engage BitGo alongside Coinbase underscores its commitment to bolstering risk management within its ETF custody framework. Mike Belshe, CEO of BitGo, hailed the partnership as a “huge win,” emphasizing Valkyrie’s pioneering stance in mitigating custody risks in the ETF domain.
Market commentators have lauded Valkyrie’s move, with many anticipating a ripple effect across the industry. Bloomberg analyst James Seyffart expressed his expectation for other ETF providers to follow suit, suggesting that diversifying custodians could become a widespread trend.
Nate Geraci, president of The ETF Store, echoed this sentiment, noting ongoing discussions between fund issuers and alternative custodians such as Gemini, Kraken, and BitGo. The move towards supplementary custodians reflects a growing recognition of the importance of robust custody solutions in ensuring the security and integrity of ETF assets.
Valkyrie’s strategic partnership with BitGo signifies a significant milestone in the evolution of ETF custody practices, setting a precedent for enhanced risk management and resilience within the burgeoning ETF landscape.