The Crypto Roundup: 02 February 2024 | CryptoCompare.com

With spot Bitcoin exchange-traded funds (ETFs) having launched less than a month ago, asset managers have started exploring strategies to increase their profitability.

Valkyrie Investments has said it’s retaining BitGo as a second custodian to safeguard customers assets, diversifying beyond Coinbase, which currently plays a pivotal role for the majority of Bitcoin ETF issuers, including Valkyrie’s own Bitcoin ETF, which trades under the BRRR ticker, and has around $113 million in assets.

The approach not only helps reduce counterparty risk, but also positions the ETF issuer to negotiate better fee structures with custodians in the future in a bid to improve their profitability.

It comes after spot Bitcoin ETFs entered a fee war just before being launched on January 11, with seven of the funds waiving the fees during an introductory period.

Bakkt, a firm offering cryptocurrency custody and trading services, has reportedly been in talks with several ETF managers, with its CEO Gavin Michael saying there’s “a heavy price war going on.”

The head of prime brokerage at BitGo Adam Sporn revealed the firm is in talks with other spot Bitcoin ETF issuers, while officials at other custodians, including Gemini, Anchorage Digital, and Kraken, said they’re in discussions with ETF providers on becoming secondary custodians.

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• Source: https://www.cryptocompare.com/email-updates/daily/2024/feb/02/