Opportunities Around GBTC
Good afternoon,
We at Valkyrie are excited to present our proposal to become the new sponsor and manager of the Grayscale Bitcoin Trust (GBTC). As a registered investment advisor and trusted investment manager with extensive experience in the world of bitcoin and cryptocurrency, our company is uniquely qualified to take on this role.
Valkyrie has a proven track record of success in the realm of digital asset management. Our Bitcoin Trust has operated with daily liquidity since its inception on January 1st, 2021. Later that year, we launched publicly-traded bitcoin-related ETFs and have a strong reputation for working with and caring about our investors and partners.
In addition to our expertise in digital asset management, we have a team of experienced closed-end fund managers who, while at Guggenheim Partners, launched, managed and even took over a closed end fund from another manager who let the discount slip well beyond 10% without taking action. We are well-equipped to handle the unique challenges and opportunities presented by GBTC. Our combination of technical and regulatory knowledge and hands-on experience makes us the ideal choice to take on this role.
We are also excited to announce the launch of the Valkyrie Opportunistic Fund, LP that seeks, among other things, to take advantage of the massive discount in the spread between the NAV and price of GBTC. As the fund increases its holdings of GBTC, we are very interested in realizing the true value of the underlying bitcoin for our investors and will actively pursue this goal on their behalf.
We understand that Grayscale has played an important role in the development and growth of the bitcoin ecosystem with the launch of GBTC, and we respect the team and the work that they have done. However, in light of recent events involving Grayscale and its family of affiliated companies, it is time for a change. Valkyrie is the best company to manage GBTC to ensure its investors are treated fairly.
In our proposal, we outline several key ways in which we plan to improve upon the current management of GBTC. Specifically, we propose to:
- Facilitate orderly redemptions at net asset value (NAV) for all investors who want it through a timely Regulation M filing. This will ensure that all investors have the option to redeem their shares at a fair price, without any delays or obstacles.
- Lower the fees to a more equitable level, in line with best industry practices. We propose a fee of 75 basis points, which is significantly lower than the current rate of 200 basis points.
- Attempt to offer redemptions in both Bitcoin and cash for investors. This will give investors greater flexibility and choice when it comes to redeeming their shares.
Our proposal represents a significant improvement over the current management of GBTC. We hope that you will consider it carefully. We are committed to putting the interests of GBTC shareholders first, and we have the experience and expertise to do so effectively.
Thank you for your time and consideration.
Sincerely,
Steven McClurg
Co-founder & CIO, Valkyrie Investments
