11 min readIntroduction
Bitcoin is the first decentralized digital currency with a capped supply of 21 million coins. It exists independently of central banks or governments, setting it apart from traditional fiat currencies, which can be subject to inflationary pressures. Its unique properties, such as scarcity, security through blockchain technology, and decentralized nature, may make it an attractive asset for portfolio diversification, particularly in today’s uncertain financial landscape. Including Bitcoin in a portfolio may enhance risk-adjusted returns due to its low correlation with traditional asset classes, offering a potential balance to stocks, bonds, and commodities.
The CoinShares Valkyrie Bitcoin Fund (BRRR) offers investors access to Bitcoin through a publicly traded investment vehicle. BRRR is Sponsored by CoinShares, an established player in the digital asset space since 2014, BRRR provides a convenient way for investors to gain exposure to Bitcoin while benefiting from the digital asset storage expertise of qualified custodians.
BRRR is not an investment company registered under the Investment Company Act of 1940, and therefore is not subject to the same regulatory requirements as mutual funds or traditional ETFs. BRRR is subject to the rules and regulations of the Securities Act of 1933.
This guide outlines key details about BRRR, including its structure, investment objective, and why investors may consider adding BRRR to their portfolios.
Why invest in BRRR?
Convenience
BRRR allows investors to access Bitcoin exposure through their preferred brokers, simplifying the process of including Bitcoin in a diversified portfolio. By holding BRRR shares, investors indirectly own Bitcoin, without the need for a private wallet, private keys, or direct management of the cryptocurrency.
Direct Bitcoin exposure
The CoinShares Valkyrie Bitcoin Fund owns Bitcoin, meaning for every share, Bitcoin is held by qualified custodians on behalf of BRRR. These custodians are chartered by the New York Department of Financial Services.
Built by experts
CoinShares has been a pioneer in the digital asset industry since 2014, managing Europe’s leading crypto Exchange Traded Products (ETP) in terms of assets under management. This expertise extends to BRRR, which is an extension of CoinShares' experience and deep knowledge of both traditional and digital asset markets.
Investment Objective of BRRR
The purpose of the CoinShares Valkyrie Bitcoin Fund is to hold Bitcoin. BRRR is designed to offer investors a cost-effective and accessible way to gain exposure to Bitcoin, making it easier to diversify their portfolios with a prominent digital asset. The investment objective of BRRR is for its shares to reflect the performance of the value of a bitcoin as represented by the CME CF Bitcoin Reference Rate - New York Variant (the “Index”)[1], less the fund’s liabilities and expenses. There can be no assurance that BRRR will achieve its investment objective.
Key product details
Ticker: BRRR
ISIN: US91916J1007
Sponsor Fee: 0.25% p.a.
Assets Under Management: $591,108,544 USD as of 30th September 2024
Custodians: Coinbase Custody Trust Company, LLC, and BitGo Trust Company, Inc.
Benchmark: CME CF Bitcoin Reference Rate - New York Variant (BRRNY)
Exchange: Nasdaq
Asset security and custody
BRRR implements a multi-custodian approach, ensuring that its Bitcoin is distributed among several qualified custodians with the goal of reducing custody risk to enhance the security of BRRR’s Bitcoin assets.
How to buy BRRR
Investors can purchase shares of BRRR through their preferred brokerage platforms. This seamless integration allows investors to buy, sell, or hold BRRR alongside other investments in their portfolios, without the need for special cryptocurrency wallets or exchanges.
Steps to invest:
Choose a broker: Ensure your brokerage supports Nasdaq-listed products.
Search for BRRR: Enter the ticker symbol (BRRR) to find the product.
Place your order: Decide how many shares you want to buy and place a market or limit order.
Conclusion
The CoinShares Valkyrie Bitcoin Fund (BRRR) provides investors with direct exposure to Bitcoin through a publicly traded product. BRRR allows for convenient portfolio integration. As the digital asset market continues to evolve, BRRR is an option for those looking to gain access to Bitcoin in a traditional investment format.
For more information about BRRR and how to invest, visit CoinShares Valkyrie Bitcoin Fund.
[1] The CME CF Bitcoin Reference Rate - New York Variant (BRRNY) is a once a day benchmark index price for Bitcoin that aggregates trade data from multiple Bitcoin-USD markets operated by major cryptocurrency exchanges that conform to the CME CF Constituent Exchange Criteria. It is the pre-eminent index price for Bitcoin risk settlement that is synchronized to the traditional US financial market close of 1600 New York Time. The index was launched on February 28th 2022. See https://www.cfbenchmarks.com/data/indices/BRRNY for more information.
One cannot invest directly in an index.
CoinShares Valkyrie Bitcoin Fund (BRRR) - Risks and Disclosures
Investing Involves Significant Risk. The loss of principal is possible. BRRR may not be suitable for all investors. This investment case does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial advisor/financial consultant before making any investment decisions.
BRRR’s investment objectives, risks, charges and expenses should be considered before investing. The prospectus contains this and other important information, and it may be obtained at https://coinshares.com/en/d/etf/prospectus/brrr/ . Read it carefully before investing.
Bitcoin trading prices are volatile and shareholders could lose all or substantially all of their investment in BRRR.This is a new fund with limited operating history.
Shares of BRRR are bought and sold at market price (not NAV) and are not individually redeemed from the fund. Any applicable brokerage fees and commissions apply and will reduce returns.
Bitcoin Investing Risk.
BRRR invests in bitcoin. Bitcoin is a relatively new and highly speculative investment. The risks associated with bitcoin include the following:
Bitcoin is a new technological innovation with a limited history. There is no assurance that usage of bitcoin will continue to grow. A contraction in use of bitcoin may result in increased volatility or a reduction in the price of bitcoin, which could adversely impact the value of BRRR. The Bitcoin Network was launched in January 2009, platform trading in bitcoin began in 2010, which limits a potential shareholder’s ability to evaluate an investment in BRRR.
BRRR is exposed to risks associated with the price of bitcoin, which is subject to numerous factors and risks. The price of bitcoin is impacted by numerous factors, including:
The total and available supply of bitcoin, including the possibility that a small group of early bitcoin adopters hold a significant proportion of the bitcoin that has thus far been created and that sales of bitcoin by such large holders may impact the price of bitcoin;
Global bitcoin demand, which is influenced by the growth of retail merchants’ and commercial businesses’ acceptance of bitcoin as payment for goods and services, the security of online bitcoin exchanges and public bitcoin addresses that hold bitcoin, the perception that the use and holding of bitcoin is safe and secure, the lack of regulatory restrictions on their use, and the reputation regarding the use of bitcoin for illicit purposes;
Global bitcoin supply, which is influenced by similar factors as global bitcoin demand, in addition to fiat currency (i.e., government currency not backed by an asset such as gold) needs by miners and taxpayers who may liquidate bitcoin holdings to meet tax obligations;
Investors’ expectations with respect to the rate of inflation of fiat currencies and deflation of bitcoin;
Foreign exchange rates between fiat currencies and digital assets such as bitcoin;
Interest rates;
The continued operation of bitcoin exchanges in the United States and foreign jurisdictions, including their regulatory status, trading and custody policies, and cyber security;
Investment and trading activities of large investors, including private and registered funds, that may directly or indirectly invest in bitcoin;
Regulatory measures, if any, that restrict the use of bitcoin as a form of payment or the purchase or sale of bitcoin, including measures that restrict the direct or indirect participation in the bitcoin market by financial institutions or the introduction of bitcoin instruments;
The maintenance and development of the open-source software protocol of the Bitcoin Network;
Increased competition from other cryptocurrencies and digital assets, including forks of the Bitcoin Network;
Developments in the information technology sector;
Global or regional political, economic or financial events and situations;
Investor or Bitcoin Network participant sentiments on the value or utility of bitcoin; and
The dedication of mining power to the Bitcoin Network and the willingness of bitcoin miners to clear bitcoin transactions for relatively low fees.
Negative developments in any of these factors could adversely impact an investment in BRRR. A decline in the adoption of bitcoin could negatively impact the performance of BRRR. As a new asset and technological innovation, the bitcoin industry is subject to a high degree of uncertainty. The adoption of bitcoin will require growth in its usage for various applications that include retail and commercial payments, cross-border and remittance transactions, speculative investment and technical applications.
BRRR relies on third party service providers to perform certain functions essential to the affairs of the fund and the replacement of such service providers could pose a challenge to the safekeeping of the digital asset and to the operations of the fund.
CoinShares Co. is the sponsor of BRRR. CoinShares Co. is not registered as an investment adviser under the Investment Advisers Act of 1940 and BRRR is not registered under the Investment Company Act of 1940. BRRR is subject to the rules and regulations of the Securities Act of 1933.
Paralel Distributors LLC is the Marketing Agent of BRRR and is not affiliated with CoinShares Co.
