Grayscale CEO replaced by Wall Street veteran
Michael Sonnenshein has stepped down as CEO of Grayscale, the company behind what is still the largest Bitcoin ETF. Barry Silber, the CEO of the parent company Digital Currency Group, publicly thanked 𝕏 for the 10 years or so that Sonnenshein led Grayscale as CEO.
2/ I want to thank @Sonnenshein- during his 10 years @Grayscale, Michael guided the firm through exponential growth & oversaw its pivotal role in bringing spot bitcoin ETFs to market, leading the way for the broader financial industry. We wish him the best in his future endeavors-
Barry Silbert (@BarrySilbert) May 20, 2024
New CEO comes from Wall Street
Peter Mintzberg, a Wall Street veteran, will take over the position on August 15. Mintzberg currently works as head of the strategy department for asset management at the major bank Goldman Sachs and previously at large financial service providers such as BlackRock and Invesco.
This fits into a picture where not only are more and more Wall Street firms moving into the Bitcoin market, but people who have their origins in the crypto industry are increasingly vacating their posts.
Outflows from GBTC the reason?
Grayscale's flagship product, the Grayscale Bitcoin Trust (GBTC), has struggled with high outflows since its conversion from a closed-end trust to a spot ETF. More than half of the almost 620,000 BTC held by GBTC as at January 10, 2024 have since flowed out of the investment product. This is probably primarily due to the management fee of 1.5 percent, which is many times higher than that of its competitors. BlackRock, for example, only charges 0.25 percent with its Bitcoin ETF IBIT. The ETF of the world's largest asset manager has been able to absorb around 275,000 BTC since its approval and therefore currently only manages a good 10,000 BTC less than the largest ETF, GBTC.
Accordingly, some market observers suspect that the outflows from GBTC, which have set a negative record for an ETF, are the primary reason for the change in position.
Agree $17b in outflows is no joke. Like a sports team losing games outflows are tough on the spirit and culture so usually someone get fired, usually the head coach. But... in this case is he the one who wanted 1.5% fee? If not, then WHAT DID THEY EXPECT? It was a tough situation... https://t.co/HRVB7Ib3pH-
Eric Balchunas (@EricBalchunas) May 20, 2024
It remains to be seen whether the new CEO will change the structure of GBTC and put the ETF back on the road to success. However, due to the market position and reputable reputation of BlackRock and Co. alone, it is more likely that the big players from the traditional financial world will be ahead of the Bitcoin spot ETFs in the long term.
