Michael Sonnenshein is stepping down as the cryptocurrency asset manager’s chief executive officer at Grayscale Investments after a decade there. He will be succeeded by Peter Mintzberg, currently head of global strategy for wealth and wealth management at Goldman Sachs Asset Management. Mintzberg will assume the CEO role on August 15, according to a press release from Grayscale. During this period, Chief Financial Officer (CFO) Edward McGee will assume leadership of the company.
Sonnensein, who joined Grayscale in 2014 and served as CEO for the past three years, decided to leave to pursue other interests, the company said. The Wall Street Journal was the first to report this news.
During Sonnenshein’s tenure, Grayscale achieved significant wins against the SEC, which led to the approval of the first spot Bitcoin ETF. The company has long been trying to convert the Grayscale Bitcoin Trust (ticker GBTC) into an exchange-traded fund. However, since the conversion, GBTC has experienced significant outflows as investors gravitated towards the newly launched and more cost-effective spot Bitcoin ETF.
Once the primary means for investors to gain exposure to Bitcoin without purchasing the token directly, GBTC has reached nearly $44 billion in assets in 2021. However, since the ETF conversion in January, GBTC has experienced outflows exceeding $17.6 billion. In contrast, other U.S. spot Bitcoin funds have drawn positive inflows this year, with BlackRock’s $15.6 billion leading the way. GBTC’s 1.5% expense ratio has been cited as a deterrent to investors compared to the low fees charged by other funds.
Sonnenshein defended GBTC’s relatively high fees in a January interview with Bloomberg TV, citing the company’s size, liquidity and performance. Despite Grayscale’s efforts to convert GBTC into an ETF, the SEC rejected the proposal in 2022, arguing that Bitcoin-based ETFs lack sufficient oversight to detect fraud. Grayscale filed a lawsuit against the SEC, alleging discrimination against its product while approving a similar Bitcoin futures ETF.
The search for a new CEO will begin in late 2023, according to sources familiar with the matter cited by the Wall Street Journal. However, this decision had nothing to do with GBTC’s performance or outflow.
Sonnenshein said in a press release that the crypto asset class is at a critical turning point, making now the right time for a smooth transition.
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