Business

Grayscale CEO Michael Sonnenshein Steps Down

Peter Mintzberg, a former executive at Goldman Sachs, will succeed Sonnenshein on August 15, according to Barry Silbert the founder and CEO of Digital Currency Group (DCG) the parent organization of Grayscale

Michael Sonnenshein|Google image

Silbert stated in an X post dated May 20:

“As we position Grayscale for its next phase of growth, excited to welcome Peter Mintzberg as Grayscale’s CEO, effective August 15. Joining from Goldman Sachs, Peter has 20+ years of experience across prominent asset managers, including BlackRock, OppenheimerFunds & Invesco.”

Grayscale, an organization established in 2013, is a globally recognized leader in the administration of cryptocurrency assets, with a portfolio exceeding $50 billion worth of holdings as of September 2021.

During his ten years as CEO, Silbert writes that Sonnenshein was instrumental in introducing the first spot Bitcoin exchange-traded funds (ETFs) in the United States. Sonnenshein stated:

“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.”

Grayscale was one of the initial issuers of Bitcoin ETFs in the United States. Grayscale claims that its Grayscale Bitcoin Trust ETF (GBTC), operational since 2013, was converted to an ETF on January 11. As a result, GBTC is the first publicly traded Bitcoin fund.

GBTC by Grayscale is the largest ETF regarding on-chain Bitcoin holdings, with more than 287,801 Bitcoin currently in its custody (BTC: $66,894).

Largest U.S. Bitcoin ETFs. Source: Dune

Worth $19.3 billion, representing a market share of 34.9%. Conversely, Grayscale imposes the most significant fee on investors—1.5 percent—in contrast to the industry average of 0.20 to 0.25 percent.

Dune reports that BlackRock’s iShares ETF (IBIT) is the second-largest ETF in market share, with over 274,000 BTC worth $18.4 billion in holdings.

Bitcoin ETFs are “orange poker chips” that may hinder the adoption of Bitcoin on the blockchain.
According to Jim Bianco, founder of the macro research firm Bianco Research, spot Bitcoin ETFs may cannibalize on-chain liquidity despite their promise to attract more senior boomers to Bitcoin. Bianco wrote in a May 19 X post:

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

According to Bianco, if ETFs continue to divert on-chain liquidity back into the realm of conventional finance (TradFi), this could undermine Bitcoin’s reputation as a decentralized alternative to the legacy fiscal system:

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

James Emmanuel

James is a Computer Science student with a robust foundation in tech and a skilled DevOps engineer. His technical expertise extends to his role as a news reporter at Protechbro, where he specializes in crafting well-informed, technical content that highlights the latest trends and innovations in technology.