Valkyrie CIO: Bitcoin spot ETF issuers with AUM below $100 million may be eliminated from the market

Valkyrie Funds Chief Investment Officer (CIO) Steven McClurg recently stated in an interview that major Bitcoin spot ETFs have been open for trading for nearly a month, but the sector may see a shrinkage in size by the end of this year.

Steven McClurg predicts that out of the ten issuers currently operating Bitcoin spot ETFs, only "about seven or eight" issuers may remain by the end of the year. This is because the cost of operating Bitcoin spot ETFs may be too high, especially amidst this fee-cutting competition, which could harm the profitability of issuers already facing difficult circumstances.

Steven McClurg said: "If your assets under management haven't reached $100 million by now, then you might as well give up."

Furthermore, McClurg expects more funds to flow out from Grayscale GBTC and divert into other spot ETFs. Since their approval for launch, BlackRock's iShares Bitcoin ETF and Fidelity's Wise Origin Bitcoin Fund have amassed over $3 billion in assets under management in just one month, while ARK 21Shares' ARKB and Bitwise's BITB have also attracted over $700 million in fund inflows.

Given this situation, McClurg expressed satisfaction with Valkyrie's performance on its Bitcoin spot ETF. As of February 8th, its assets under management were approximately $123.7 million; although significantly lower than those of larger companies' product AUMs, McClurg mentioned that surpassing them is not the main focus.

McClurg explained: "You can't beat BlackRock and Fidelity; they have established markets. However if you compare downwards (i.e., against relatively smaller competitors), I think we are doing very well."