Crypto Alert: Valkyrie to Launch DeFi Fund on Nov 22 as CEO Cites ‘Massive Opportunity in Space’

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Crypto firm Valkyrie Investments – which recently launched the second Bitcoin futures exchange traded fund (ETF), is launching a decentralized finance (DeFi) fund on November 22, “at customer request.”

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The Valkyrie On-Chain DeFi fund will invest in Ethereum, Avalanche, Solana, Binance Smart Chain, Magic and Fantom, among other protocols, Leah Wald, CEO of Valkyrie, told GOBankingRates. The fund was co-founded by Wes Cowan, head of DeFi at Valkyrie, and Will McDonough, vice president of Valkyrie, who was previously Tom Brady’s chief commercial officer.

DeFi protocols have been around for several years, but their use began to accelerate in mid-2020, according to a report from Goldman Sachs sent to GOBankingRates. DeFi, a system based on cryptocurrency technology, includes many of the same products and services as the traditional financial system – including credit and lending, trade and exchange, derivatives, and insurance. – but no centralized intermediary, Goldman Sachs Global FX co-head, Rates & EM Strategy Zach Pandl and FX analyst Isabella Rosenberg wrote in the report.

Market growth preceded the Bitcoin price spike last year and likely contributed to the renewed interest in cryptocurrencies in general. Since then, the DeFi ecosystem has grown significantly and the total locked-in value – a measure of the market value of crypto assets deposited in DeFi protocols – has grown to nearly $ 100 billion today, from less than $ 10 billion. billion dollars in the first half of 2020, according to the report.

More investors are realizing the benefits of multiple protocols, staking and lending to yield agriculture and more, Wald said, adding that the company sees “a huge opportunity in this space.”

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Growth is likely the product of yield and speculative activity, according to the Goldman Sachs report. “But user adoption may also be linked to longer-term trends, including digitization, globalization and declining trust in centralized institutions,” the report notes.

“Overall, DeFi’s innovations show potential for adoption and disruption in existing financial systems. They also demonstrate a compelling use case for blockchains and cryptocurrency technology that should help support market valuations for these assets over time, ”according to the report.

Wald explained that they chose the protocols through the company’s proprietary software he developed to analyze the data on-chain.

When asked how this fund is different from its competitors’ DeFi funds, Wald explained that Valkyrie is not a passively managed fund “that only holds DeFi tokens and does not actually take advantage of the. On-chain DeFi ecosystem “.

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“The Valkyrie Onchain DeFi fund, in addition to investing in DeFi tokens, holds our on-chain assets,” she said. “This allows us to participate in the upside, while also getting extra return through lending, cash pools, farming, and staking in the on-chain DeFi ecosystem. We get the appreciation plus the compound return generated by the on-chain DeFi stake. In addition to investing in DeFi tokens, the fund will hold on-chain assets.

The fund will be available to accredited investors in the United States and in the majority of international countries.

In terms of the risks associated with the space, Wald says they’re the same as any other digital asset strategy. “Protocols can be volatile, but we see this as an advantage rather than a disadvantage,” she said. “Volatility is an opportunity. “

Last month, the company launched the Valkyrie Bitcoin strategy, which trades on the Nasdaq exchange under the symbol “BTF”.

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The Valkyrie ETF aims to track only the value of Chicago Mercantile Exchange (CME) Bitcoin futures, according to Valkyrie. Bitcoin futures, which are agreements to buy or sell an asset at a specific price, are fully regulated in the United States on the CME. The objective of the fund – which does not invest directly in Bitcoin – is to track the value of these products in a liquid basket of securities. “In doing so, BTF provides exposure to a wider audience of investors, advisers and more, without the pitfalls and obstacles typically associated with investing directly in crypto assets,” the company said in a statement.

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About the Author

Yaël Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She has also worked as a vice president / senior content writer for major New York-based financial firms including New York Life and MSCI. Yaël is now a freelance writer and more recently she co-authored the book “Blockchain for Medical Research: Accelerating Trust in Healthcare”, with Dr Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, one in journalism from New York University and one in Russian studies from Toulouse-Jean Jaurès University, France.

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