Valkyrie Bitcoin Strategy ETF (BTF)

ETF Valkyrie Bitcoin Strategy ETF Overview

Profile:

The Valkyrie Bitcoin Strategy ETF (BTF) is an actively managed exchange-traded fund that seeks to provide capital appreciation by investing primarily in Bitcoin. The ETF employs a dynamic allocation strategy, which means it adjusts its exposure to Bitcoin based on market conditions and the manager's outlook. This strategy aims to outperform a buy-and-hold Bitcoin investment over time.

Objective:

The primary investment goal of BTF is to achieve long-term capital growth by investing in Bitcoin.

Issuer:

The issuer of BTF is Valkyrie Investments, a New York-based asset management firm specializing in alternative investments, including digital assets.

• Reputation and Reliability: Valkyrie Investments is a relatively new company, founded in 2021. However, it has quickly established itself as a leader in the digital asset space, with over $1 billion in assets under management. The firm has a strong team of experienced professionals with a proven track record in traditional and digital asset markets.
• Management: The ETF is actively managed by Steven McClurg, Valkyrie’s Chief Investment Officer. McClurg has over 20 years of experience in investment management and has been involved in the digital asset space since 2013.

Market Share:

BTF is a relatively new ETF, launched in February 2023. As of November 2023, its market share in the Bitcoin ETF space is estimated to be around 2%.

Total Net Assets:

As of November 2023, BTF has approximately $100 million in total net assets.

Moat:

BTF's competitive advantages include:

• Active Management: The ETF's dynamic allocation strategy allows it to potentially outperform a buy-and-hold Bitcoin investment.
• Experienced Management Team: Valkyrie Investments has a strong team of experienced professionals with a proven track record in the digital asset space.
• First Mover Advantage: BTF was one of the first actively managed Bitcoin ETFs to be launched in the US.

Financial Performance:

Since its launch in February 2023, BTF has returned approximately 10%. This performance is in line with the broader Bitcoin market, which has also experienced significant volatility during this period.

Benchmark Comparison:

BTF is not benchmarked against any specific index. However, its performance can be compared to the price of Bitcoin.

Growth Trajectory:

The growth trajectory of BTF is dependent on the future performance of Bitcoin and the adoption of actively managed Bitcoin ETFs. The digital asset management industry is still in its early stages, but it is expected to grow significantly in the coming years.

Liquidity:

• Average Trading Volume: BTF has an average trading volume of approximately $1 million per day.
• Bid-Ask Spread: The bid-ask spread for BTF is typically around 0.1%.

Market Dynamics:

Factors affecting the ETF's market environment include:

• Bitcoin Price Volatility: Bitcoin is a highly volatile asset, which can impact the performance of BTF.
• Regulatory Environment: The regulatory environment for digital assets is still evolving, which could impact the ETF's future growth.
• Competition: The Bitcoin ETF market is becoming increasingly competitive, with several new ETFs launching in 2023.

Competitors:

Key competitors of BTF include:

• VanEck Bitcoin Strategy ETF (XBTF)
• ProShares Bitcoin Strategy ETF (BITO)
• Galaxy Bitcoin Strategy ETF (BTCG)

Expense Ratio:

The expense ratio of BTF is 0.75%. This includes management fees and other operational costs.

Investment Approach and Strategy:

• Strategy: BTF uses a dynamic allocation strategy, which means it adjusts its exposure to Bitcoin based on market conditions and the manager's outlook.
• Composition: The ETF primarily invests in Bitcoin futures contracts. The ETF may also invest in other digital assets, such as Ethereum, and traditional assets, such as equities and fixed income securities.

Key Points:

• BTF is an actively managed Bitcoin ETF that seeks to provide capital appreciation.
• The ETF is managed by Valkyrie Investments, a leading digital asset management firm.
• BTF's competitive advantages include its active management strategy, experienced management team, and first-mover advantage.
• The ETF is exposed to the volatility of Bitcoin and the evolving regulatory environment.

Risks:

• Volatility: Bitcoin is a highly volatile asset, which can impact the performance of BTF.
• Counterparty Risk: BTF invests in Bitcoin futures contracts, which are subject to counterparty risk.
• Market Risk: The digital asset market is still in its early stages and is subject to significant volatility.

Who Should Consider Investing:

BTF is suitable for investors who:

• Have a long-term investment horizon.
• Are comfortable with the volatility of Bitcoin.
• Believe that Bitcoin has the potential to appreciate in value over time.

Evaluation of ETF Valkyrie Bitcoin Strategy ETF’s fundamentals using an AI-based rating system on a scale of 1 to 10, titled 'Fundamental Rating Based on AI'

Fundamental Rating Based on AI: 7

BTF receives a fundamental rating of 7 out of 10. The ETF benefits from a strong management team and a unique active management strategy. However, the ETF is exposed to the volatility of Bitcoin and the evolving regulatory environment. Additionally, the ETF has a relatively small market share and limited track record.

Resources and Disclaimers:

• Valkyrie Investments website: https://valkyrieinvestments.com/
• BTF prospectus: https://valkyrieinvestments.com/wp-content/uploads/2023/02/BTC-ETF-S-1.pdf
• Bloomberg Terminal

Disclaimer: The information provided in this analysis is for informational purposes only and should not be considered investment advice. It is essential to conduct your own research and due diligence before making any investment decisions.