Valkyrie files for ETF aimed at investing in publicly-traded, bitcoin-holding companies

Valkyrie Digital Assets has filed for a new exchange-traded fund (ETF) that would invest in companies that hold bitcoin on their balance sheets.

The firm submitted its filing to the Securities and Exchange Commission (SEC) for the Valkyrie Innovative Balance Sheet ETF on Friday. 

The practice of adding bitcoin to a company's balance sheet gained popularity as MicroStrategy continued to make large purchases. Soon after, S&P 500 company Tesla added bitcoin to its balance sheet, making it so that any investor with an S&P index fund had indirect exposure to bitcoin. The Valkyrie ETF is adding another way to gain indirect exposure. 

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The fund will primarily invest in common stocks, but it may invest up to 20% of net assets in securities. It plans to focus on investing in bitcoin-related firms, especially those with what it terms "innovative balance sheets."

The investment adviser, KKM Financial, will include companies that "directly or indirectly invest in, transact in, or otherwise have exposure to bitcoin or operate in the bitcoin ecosystem," as part of the fund's investments. This could include bitcoin trading platforms, miners, custodians, payments companies and wallet providers, according to the S-1. It plans to issue shares on NYSE Arca. 

Valkyrie also lodged a bitcoin ETF prospectus with the SEC in January of this year, joining others in an increasingly crowded bid for first approval. VanEck and Cboe's offering is the only one with an impending decision date as of now. 

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Aislinn Keely is a reporter on The Block's policy team holding down the legal beat. She covers court decisions, bankruptcies, regulatory actions and other key moments in the legal sphere, putting them in context for the wider crypto industry. Before The Block, she lent her voice to the NPR affiliate WFUV and helmed Fordham University's student newspaper. Send tips or thoughts on all things policy and legal to [email protected] or follow her on Twitter for updates @AislinnKeely.