In a recent development disclosed through a filing with the United States Securities and Exchange Commission (SEC), Valkyrie has enlisted BitGo as an additional custodian for its spot Bitcoin ETF, alongside continuing its partnership with Coinbase Custody. The addition of BitGo as a custodian marks a significant step for Valkyrie’s BRRR product, which has seen its volume increase by up to 12%.

The SEC document stated, “The Sponsor anticipates utilizing the custodial services of both Coinbase and BitGo to custody the Trust’s bitcoin.” This strategic decision positions Valkyrie among a growing list of asset managers diversifying their custodial relationships beyond the widely utilized Coinbase Custody service.

Among the eleven spot Bitcoin ETFs approved by the SEC, including notable names like BlackRock, Bitwise, and ARK 21Shares, Coinbase Custody has been a popular choice. BlackRock, for instance, had designated Coinbase as the custodian for its spot Bitcoin ETF in its initial application to the SEC, reinforcing their pre-existing partnership.

However, Hashdex emerged as a distinct entity by opting for BitGo as the custodian for its spot Bitcoin ETF, indicating a shift towards diversification of custodian services among ETF issuers. This move suggests a growing concern over Coinbase’s infrastructural security and its potential influence over ETF issuers.

Recent discourse on Coinbase Custody was further amplified by Bitwise's transparency in publishing Bitcoin addresses for its BITB holdings. This action, initially seen as a gesture of openness, led to speculative discussions about the reliability of crypto custodians, particularly Coinbase.

Samson Mow, CEO of JAN3 and a prominent figure in the Bitcoin community, criticized custodians like Coinbase for inadequate investment in their Bitcoin infrastructure, attributing it to a broader focus on altcoins. He predicted a trend where spot Bitcoin ETF issuers might lean towards in-house custody solutions or shift their Bitcoin holdings to other custodians, possibly preferring those specializing in Bitcoin-only services.

With Valkyrie’s decision to incorporate BitGo alongside Coinbase Custody, it appears that Mow’s forecast might be materializing, potentially setting a precedent for other issuers to reevaluate their custodial partnerships.

CoinGape