Cryptocurrencies

Michael Sonnenshein will step down as CEO of Grayscale Investments

Michael Sonnenshein will step down as CEO of Grayscale Investments LLC.

Sonnenshein will be replaced by former Goldman Sachs CEO Peter Mintzberg effective August 15, according to Barry Silbert, founder and CEO of Digitalency Group, Grayscale’s parent company.

Silbert wrote in a May 20 post:

“As we position Grayscale in its next phase of growth, we are excited to welcome Peter Mintzberg as CEO of Grayscale, effective August 15. Peter joins from Goldman Sachs and brings over 20 years of experience at leading asset managers, including BlackRock, OppenheimerFunds and Invesco.”

Founded in 2013, Grayscale is among the world’s leading cryptocurrency asset managers, with over $50 billion in assets under management as of September 2021.

During his 10 years as CEO, Sonnenshein played a pivotal role in launching the first U.S. bitcoin (BTC) spot exchange-traded funds (ETFs), according to Silbert, who wrote:

“Michael has guided the company through accelerated growth and oversaw its pivotal role in bringing spot Bitcoin ETFs to market, paving the way for the broader financial industry. We wish him success in his future endeavours.”

Grayscale was among the first issuers of Bitcoin ETFs in the United States. Grayscale Bitcoin Trust (GBTC) converted into an ETF on January 11, although the fund had previously been in operation since 2013. This made it the first publicly traded bitcoin fund, according to Grayscale.

Grayscale’s GBTC is the largest on-chain Bitcoin investment ETF, currently holding over 287,801 BTC, worth $19.3 billion, and holding a 34.9% market share. However, Grayscale also requires investors to pay the highest fee – 1.5%, compared to the industry standard of 0.20% to 0.25%.

By comparison, BlackRock’s iShares ETF is the second-largest ETF, holding more than 274,000 bitcoins, worth $18.4 billion, and holding a 33.3% market share, according to Dune.

Largest Bitcoin ETFs in the US. Source: Dune

Related: 10x Research says Bitcoin’s rise above $67.5K could lead to new highs

Bitcoin ETFs are “orange poker chips” that could hurt Bitcoin’s on-chain adoption

Despite promising to attract more baby boomers to Bitcoin, spot Bitcoin ETFs could cannibalize on-chain liquidity, according to Jim Bianco, founder of macro research firm Bianco Research. Bianco wrote in a May 19 post:

“Drawing money off-chain into the world of Tradfi in the form of an orange FOMO poker chip will not move digital assets to the promised land of a new decentralized financial system. “If anything, it hinders the achievement of this goal.”

If ETFs continue to pull on-chain liquidity back into the world of traditional finance (TradFi), this could challenge Bitcoin’s narrative as a decentralized alternative to the legacy financial system, according to Bianco:

“If the goal is to develop a new financial system, an ETF that pulls money back into the Tradfi world will not reach that promised land.”

magazine: Trader turns $3K into $46M in PEPE, Ethereum Gas Fix, Tornado Developer Convicted: Hodler’s Digest, May 12-18

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