Grayscale Investments CEO Michael Sonnenshein has resigned from his position as asset manager amid a large investor exodus from the company’s GBTC ETF.
On May 20, the Wall Street Journal reported that Peter Mintzberg would replace Sonnenshein as head of the company in August. Mintzberg is a finance veteran with decades of experience as head of global strategy at Goldman Sachs for the bank’s asset management operations.
Grayscale did not immediately respond to crypto.news’ request for comment.
The development follows a possible trend reversal for Grayscale’s converted GBTC fund, which last week recorded its first weekly net inflow in about 19 trading weeks. GBTC recorded net inflows of $31.6 million between May 13 and May 17, Fineqia International research analyst Matteo Greco shared with crypto.news.
However, GBTC flows last week were down compared to about $17.6 billion worth of outflows since January, when the Securities and Exchange Commission (SEC) approved a spot Bitcoin (BTC) ETF.
At press time, it was unclear what impact this Grayscale exodus had on Sonnenshein’s decision to resign as CEO. However, less than six months after GBTC converted from a trust to an exchange-traded fund, the investment giant lost 50% of its assets under management, according to previous reports.
Spot Bitcoin ETFs saw net inflows of $950 million last week.
GBTC wasn’t the only U.S. spot BTC ETF to attract investor capital last week, according to Greco. According to SoSoValue analysis, weekly net inflows from 11 funds issued by Grayscale, BlackRock, Fidelity, ARK 21Shares, Bitwise, Invesco Galaxy, VanEck, Valkyrie, Franklin Templeton, WisdomTree and Hashdex cumulatively reached $950 million.
Greco pointed out that renewed interest pushed the price of Bitcoin up 7% in a week, with the largest digital asset closing at around $66,300. This is due to low daily volatility and moderate spot BTC ETF demand over five weeks.
Spot Ethereum ETF Scenario
As spot Bitcoin ETF inflows rebound and the Bitcoin price recovers, Fineqia International analysts say interest will also expand in spot Ethereum (ETH) ETFs.
The US SEC is expected to finalize its decision on the filings of VanEck and ARK 21Shares on May 23 and May 24, respectively. “Market participants are expecting the SEC to hold off on approving such a product, despite approving the BTC ETF in January,” Greco explained, echoing the Bloomberg expert’s predictions.
Concerns about ETH’s liquidity in the spot and futures markets and its previous classification as a security by the SEC have raised skepticism about its speedy approval. If rejected, issuers will have to resubmit their documents and, at most, could receive approval in the fourth quarter of 2024 or the first quarter of 2025.
Matteo Greco, Research Analyst, Fineqia International
Conversely, the SEC may approve a 19b-4 filing but delay S-1 approval. Form 19b-4 is used to propose rule changes to the SEC, while S-1 represents the registration statement required of a company before offering its securities.
The SEC must approve both companies before the spot Ethereum ETF can be traded on domestic U.S. exchanges. Greco noted that if the SEC takes this route, the committee could use the time to further evaluate the Ethereum market and come to a conclusion on ETH’s securities status.