CoinShares strengthens its global reach by completing acquisition of Valkyrie ETF Business

Rhea-AI Summary

CoinShares International Limited completes the acquisition of Valkyrie Funds LLC, expanding its U.S. asset management presence and adding $530 million in assets under management. CoinShares plans to rebrand Valkyrie and leverage its ETF infrastructure for innovative product development.

Positive

• Acquisition of Valkyrie Funds LLC enhances CoinShares' AUM to approximately $7.3 billion globally.
• CoinShares gains access to Valkyrie's regulatory licenses and $530 million of new assets under management.
• CoinShares plans to rebrand Valkyrie as its U.S. asset management platform and focus on product innovation.
• CoinShares aims to leverage Valkyrie's ETF infrastructure for developing its U.S. asset management business.
• Valkyrie's product line will be operated under the CoinShares brand to ensure brand consistency and awareness.

Negative

• None.

Insights

Market Research Analyst

The acquisition of Valkyrie Funds LLC by CoinShares represents a strategic move to penetrate the U.S. digital asset management market. This move is significant considering the $530 million of new assets under management Valkyrie brings to the table, which is a substantial increase for CoinShares, now reporting $7.3 billion in global AUM. The U.S. market is a major financial hub with a growing interest in digital assets, making it an attractive target for expansion. CoinShares' plan to innovate and differentiate their product offerings, such as the non-leveraged ETF $WGMI and the leveraged bitcoin futures ETF $BTFX, could position the company as a leader in thematic asset management within the U.S. This acquisition could potentially increase CoinShares' market share and influence in the digital asset space, offering investors new avenues for exposure to cryptocurrencies through regulated products.

Financial Analyst

From a financial perspective, the acquisition of Valkyrie by CoinShares is a key growth driver, immediately contributing to the top line with an additional $530 million AUM. The deal's structure, with a final purchase price contingent on a three-year earnout period, aligns the interests of both parties towards the sustained financial success of the acquired entity. This performance-based earnout could incentivize the management of Valkyrie to continue performing at high levels, ensuring a smooth integration and potentially leading to better financial results for CoinShares. Investors should monitor the progress of this integration closely, as it could have a significant impact on CoinShares' earnings and stock performance in the mid to long term.

Cryptocurrency Expert

The integration of Valkyrie's regulatory licenses with CoinShares' existing U.S. permissions is a notable development in the digital assets space. It indicates a growing trend of consolidation within the industry, as companies seek to scale up and offer a broader range of products. CoinShares' focus on product innovation and the creation of unique investment solutions, such as the 2x leveraged bitcoin futures ETF, showcases the company's commitment to leading the digital asset management field. This move could serve as a catalyst for further product development and regulatory advancements in the cryptocurrency ETF market, which has faced significant scrutiny from regulators in the past. The success of this acquisition and the subsequent product launches could influence regulatory stances and investor sentiment towards crypto-based investment vehicles.

• Acquisition follows entry into an agreement granting CoinShares an exclusive option to acquire Valkyrie Funds LLC ("Valkyrie") and the Sponsor rights to BRRR, Valkyrie's physically-backed Bitcoin ETF.
• Valkyrie's regulatory licences are complementary to CoinShares' existing U.S. permissions and contribute to establishing solid foundations for CoinShares to continue executing its U.S. asset management expansion plan.
• It provides CoinShares with a promising platform to expand its digital assets expertise into the United States and contributes approximately $530 million of new assets under management from $BTF, $WGMI, $BRRR, and $BTFX.
• CoinShares plans to rebrand Valkyrie as the Company's U.S. asset management platform that will concentrate on creating innovative products that stand out in the market.
• Valkyrie's product line will eventually be operated under the CoinShares brand to ensure brand consistency and awareness.

SAINT HELIER, Jersey, March 12, 2024 /PRNewswire/ -- CoinShares International Limited ("CoinShares" or "the Company") (Nasdaq Stockholm: CS; US OTCQX: CNSRF), the leading European investment company specialising in digital assets, today announced the completion of its acquisition of Valkyrie Funds LLC ("Valkyrie"), the investment advisory business of Valkyrie Investments Inc. ("Valkyrie Investments"), as well as the Sponsor rights to the Valkyrie Bitcoin Fund, the physically-backed Bitcoin ETF. With the addition of approximately Valkyrie's $530 million of assets under management ("AUM"), CoinShares' AUM has increased to approximately $7.3 billion globally as of 11th March 2024. This pivotal move significantly accelerates CoinShares' expansion into the U.S. market and is a further milestone towards building a global asset management franchise.

As previously announced, CoinShares has held an option to acquire Valkyrie since November 2023, which was exercised following Valkyrie Investments' launch of Valkyrie Bitcoin Fund in January 2024. The close of the acquisition enhances CoinShares' deep commitment to Valkyrie's growth and success while also promoting the creation of cutting-edge digital asset investment solutions.

Looking ahead, CoinShares plans to use the Valkyrie ETF infrastructure to develop its U.S. asset management business, with a clear focus on product innovation and market differentiation. The new platform will operate as a forward-looking thematic asset manager for the U.S. market, leaning on the success of unique thematic products such as $WGMI — the highest-performing non-leveraged ETF in 2023 across all sectors — and the newly introduced $BTFX, a 2x leveraged bitcoin futures ETF. These offerings demonstrate CoinShares' commitment to delivering diverse and advanced strategies that go beyond mere beta exposure to digital assets. CoinShares is well equipped with a comprehensive suite of tools, including hedge fund expertise, quantitative research, equity analysis, and profound digital asset knowledge, that has enabled the Company to craft innovative, high-performing, and unique products tailored to investor expectations in the evolving financial landscape.

Jean-Marie Mognetti, CEO of CoinShares, commented on the acquisition: "10 years ago, CoinShares started offering digital asset exposure to European investors through regulated products with a steadfast commitment to innovation and being first to market.

The Valkyrie acquisition is yet another step in our growth strategy with a special focus this time in the U.S. This acquisition brings an additional $530 million AUM to CoinShares, which makes it a top line contributor from day one. More importantly, it broadens our product offerings, strengthens our innovation capacity, and increases by a factor of 15 our total addressable market.

The U.S. represents a critical market for any asset manager and with a dedicated platform as well as the right product-market fit, CoinShares is poised to deliver significant value to its stakeholders.

We welcome our Valkyrie colleagues to the CoinShares team and are looking forward to their contribution to our journey."

Frank Spiteri, CoinShares' Head of Asset Management, remarked: "As Europe's leading investment company specialising in digital assets, CoinShares has consistently demonstrated trust and reliability with its crypto products and services since  2014. Our expertise is unparalleled in the crypto space, allowing us to serve not just as leaders but also as educators for our clients. We are committed to guiding them through this dynamic journey, which is supported by our seasoned research team and innovative solutions. Our promise is to be a trusted partner in navigating the complexities of digital assets."

Following the completion of the acquisition, CoinShares has initiated the process of seamlessly blending Valkyrie into its portfolio of brands, with both teams working together to ensure a smooth transition and the continued excellence of product offerings. Central to this integration is the strategic decision to rebrand Valkyrie under the CoinShares umbrella. This initiative, which is expected to be finalised by the summer, aims to unify the product lineup across the entire CoinShares ecosystem, thereby reinforcing brand consistency and amplifying brand awareness in the U.S.

Technical note:
On 12th March 2024 CoinShares and Valkyrie Investments Inc. signed and closed the definitive agreements completing CoinShares acquisition of Valkyrie Funds LLC, the U.S. digital asset manager's investment advisory business specialising in actively managed cryptocurrency exchange-traded funds. The final purchase price, which is settled at the end of a three-year earnout period, depends on the financial results of the acquired business. The definitive agreements contain customary vendor and purchaser representations.

ABOUT COINSHARES
CoinShares is the leading European investment company specialising in digital assets, that delivers a broad range of financial services across investment management, trading and securities to a wide array of clients that includes corporations, financial institutions and individuals. Focusing on crypto since 2013, the firm is headquartered in Jersey, with offices in France, Sweden, Switzerland, the U.K. and the U.S. CoinShares is regulated in Jersey by the Jersey Financial Services Commission, in France by the Autorité des marchés financiers, in the U.S. by the Financial Industry Regulatory Authority. CoinShares is publicly listed on the Nasdaq Stockholm under the ticker CS and the OTCQX under the ticker CNSRF.

For more information on CoinShares, please visit: https://coinshares.com
Company  | +44 (0)1534 513 100 | enquiries@coinshares.com
Investor Relations  | +44 (0)1534 513 100 | enquiries@coinshares.com

PRESS CONTACT

CoinShares
Benoît Pellevoizin
bpellevoizin@coinshares.com
+33 6 72 44 07 17

M Group Strategic Communications
Peter Padovano
press@coinshares.com

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SOURCE CoinShares Group

FAQ

What is the ticker symbol for CoinShares International Limited on the US OTCQX market?

The ticker symbol for CoinShares International Limited on the US OTCQX market is CNSRF.

How much did CoinShares' AUM increase to after the acquisition of Valkyrie Funds LLC?

CoinShares' AUM increased to approximately $7.3 billion globally after acquiring Valkyrie Funds LLC.

What is the focus of CoinShares' U.S. asset management platform after the acquisition?

CoinShares plans to concentrate on product innovation and market differentiation using Valkyrie's ETF infrastructure.

What is the primary goal of rebranding Valkyrie under the CoinShares umbrella?

The rebranding aims to unify the product lineup across the entire CoinShares ecosystem for brand consistency and awareness in the U.S.

Who is the CEO of CoinShares International Limited?

Jean-Marie Mognetti is the CEO of CoinShares International Limited.