Valkyrie CEO: Firm, Industry to Emerge Stronger After Crypto Winter

CEO Leah Wald says crypto winter will help cleanse industry, allow crypto firms to differentiate from competitors


Valkyrie CEO Leah Wald | Source: Valkyrie


key takeaways

  • Wald calls Grayscale’s lawsuit against the SEC “egregious and aggressive” as Valkyrie continues pursuing spot bitcoin ETF
  • Institutions are showing more interest in venture investing within the space amid the volatility

Cryptoasset manager Valkyrie is “cooking up a lot” on the product side, according to the firm’s CEO, as it seeks to build out its offerings and relationships with institutions during the bear market.

“The climate now definitely has a negative on us or any of the other issuers in the market that have crypto-adjacent or crypto products, but we just try to use this opportunity to keep our heads down and build,” Valkyrie CEO Leah Wald told Blockworks in an interview. 

Wald noted that the firm is interested in launching more actively managed strategies and continues to pursue the “holy grail” spot bitcoin ETF. The company last week launched its venture arm, led by Lluis Pedragosa, which is set to make early-stage investments in blockchain technology. 

Valkyrie launched its bitcoin futures ETF (BTF) last October and brought to market its Balance Sheet Opportunities ETF (VBB) and its bitcoin mining ETF (WGMI) in December and February, respectively.  

But benture investing can be more attractive to institutions who are not as interested in exposure to volatile digital assets, the CEO noted. BNY Mellon and WedBush Financial Services were among the institutional players that participated in Valkyrie’s $11 million funding round last month. 

“Studies have shown in the past that venture investing tends to realize the best returns in a bear market,” Wald said. “In bear markets you see builders, and we’ve seen that time and time again, not just in traditional markets but definitely in the past crypto winters as well.”

Keep reading for more excerpts from Blockworks’ interview with Wald.

Blockworks: How is the firm thinking about its pursuit of a spot bitcoin ETF?

Wald: We absolutely are still working toward our goal of bringing the holy grail — a spot bitcoin ETF — to market, especially when considering how much demand bitcoin futures ETFs have seen.

We still think that until a crypto exchange registers with the SEC, we’re not going to see spot bitcoin ETF approval. So we’re definitely, unfortunately, in a holding pattern there waiting for an exchange.

Exchanges can take 12 to 18 months for approval once registering with the SEC. Unfortunately, that’s probably a realistic timeline.

Blockworks: Fellow spot bitcoin ETF hopeful Grayscale Investments decided to sue the SEC last month. How do you see that playing out for them and other issuers, like Valkyrie, who chose not to go that route? 

Wald: We think it’s quite awful that Grayscale is trying to go against the SEC with such an aggressive approach when it’s clearly been proven throughout history that working with regulators and collaborating has always been successful for trying to get regulated assets approved, especially in the ETF wrapper. 

So we do not think this is prudent, and unfortunately are definitely not holding our breath for a positive outcome for Grayscale or the broader market while these types of honestly egregious and aggressive activities are being pursued. I think unfortunately it does shine a negative light on our industry and on the issuers, although I do think if the rest of us continue to collaborate and pursue education with the regulators, then we can probably get to that outcome that we want of that spot bitcoin ETF approval.

It could be seen as a positive in the long-term, because again, working with the SEC is a marathon, not a sprint.

Blockworks: What are your thoughts on the mining industry as those companies endure the tough market conditions?

Wald: We’re very bullish on miners and the mining industry. We definitely see a continued push for renewable energy — more sources like wind, hydro, solar — and we think that’s really because of the strategic advantage of being environmentally friendly, which has proven to have higher margins.

It’s a great industry where builders definitely prove themselves during the bear markets, and we’re nowhere close to that break-even point where miners will start to shut off. We’re not even close.

We really think that larger firms with more capital are going to be buying up more miners and strengthening their positions, and we’ll continue to see more innovative lending facilities in order to realize some of these investment opportunities. There are miners with very strong balance sheets that can take advantage of this opportunity by themselves without even needing a joint venture or partnership with a larger institution or firm. And those with weaker balance sheets are far more likely to be acquired rather than going out of business.

Blockworks: ProShares launched the first bitcoin futures ETF and has the lion’s share of assets. Being the second to market with such a product, how do you seek to build that fund up?

Wald: Notoriously, second-movers do see that type of smaller demand. Demand definitely could be more robust, but even the [Volatility Index] (VIX) futures took years to gain traction. We definitely expect demand to eventually support more than one fund, if not three, and hopefully we see other structures that are approved in the future, such as the bitcoin spot ETF.

But in the interim…it does just come down to educating institutions for longer-term relationships — getting on the platforms and just being that preferred asset manager to any institutions that look to allocate in the future after this volatility has moved out.

Blockworks: What have been some takeaways from your conversations with institutions with regard to Valkyrie’s products?

Wald: Large investors — institutions, sovereign wealth funds, pensions, endowments — they can take years to perform due diligence. So I think that people in our industry forget that just because something is an interesting buy doesn’t mean that a professional money manager or an institution is allowed to buy yet. It needs to pass through their investment committee, it needs a thesis that they can back up…and someone to champion that. And it also needs to sit within their risk parameters.

I think that the longer these funds are in the market, the better opportunity there will be when the markets start to reverse, because that will have provided that fund life and a trust with the managers and issuers in the market, so they can buy when they want to buy.

Blockworks: What is the firm monitoring from a macro perspective?

Wald: Like all other bitcoiners, we’re definitely constantly monitoring and concerned about the inflation issues, not just in the US, but globally.

As we’ve seen throughout history, there’s a great correlation between the equity market and the crypto market, so as long as we’re seeing downward pressure in traditional finance markets, we think it’s unfortunately going to continue in crypto markets as well.

At the FOMC meeting this week, we’re expecting a 75 [basis points] hike, so that should go as planned. We expect the market to remain flat and go maybe a small amount higher.

I guess we’ll see what happens with the GDP numbers that come out this week. They’re likely to confirm a recession, and that doesn’t help anyone.

Blockworks: What do you see as the silver lining to this bear market?

Wald: Having been through a couple cycles now, I think what’s most interesting to me that I also think we’ll see is just all the innovation that comes out of bear markets. There’s always a cleansing that happens of companies that were not well-suited from a foundational level that were not strong and that were fads, not trends.

There will be teams like Valkyrie who have their heads down and will be building and we’ve seen by conversations with our venture fund, there are great firms out there that are doing that, especially within this middleware, infrastructure level of the industry.

So we’ll see various blockchains come out stronger than ever, and they’ll have more of a differentiated placement in everybody’s minds, rather than what I feel for the past year has been an undifferentiated understanding in the retail market of ‘crypto’ encompassing everything. There will be more of an understanding of who is strong, who needs to be watched and who wants to be a part of which ecosystem and why.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.


Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Screen Shot 2024-05-16 at 14.53.45.png


Loss-versus-rebalancing (LVR) is arguably Ethereum DeFi’s biggest problem, and thus reducing LVR is fundamental to the success of Ethereum. This report dives into the world of LVR. We uncover its importance for AMM designers, discuss the two major mechanism design categories and various projects developing solutions, and offer a higher level perspective on the importance of AMMs in general.


Yesterday saw Congress’ upper chamber side with the House on a measure aimed at overturning SAB 121


Oklahoma’s new crypto bill will go into effect in November of this year


The deposits hit a $20 million cap in just 45 minutes


Twelve Democratic Senators voted in favor to pass the resolution Thursday

article-image is “aware” that bonding curve contracts on were exploited, and has since paused trading


Some investment pros are mulling crypto allocations between 1% and 10% and seeking ex-BTC exposure for interested clients