Flow (flow) 
Grayscale Investments CEO Michael Sonnenshein has resigned from the asset manager amid significant investor departures from the firm’s GBTC ETF.
On May 20, it was reported that Peter Mintzberg will replace Sonnenshein as the company’s head in August. Mintzberg is a financial veteran with decades of experience as Goldman Sachs’s global head of strategy for the bank’s asset management operations.
Grayscale did not immediately respond to commentary requests regarding the situation.
This development follows a potential trend reversal for Grayscale’s converted GBTC fund, which experienced its first weekly net inflows in approximately 19 trading weeks last week. According to Fineqia International research analyst Matteo Greco, GBTC garnered $31.6 million in net inflows between May 13 and May 17.
However, last week’s GBTC flows were minimal compared to around $17.6 billion worth of exits since January, when the U.S. Securities and Exchange Commission (SEC) approved spot Bitcoin (BTC) ETFs.
At this time, it remains unclear how this Grayscale exodus impacted Sonnenshein’s decision to step down as CEO. Previous reports indicated that the investment giant lost 50% of its assets under management in less than six months after GBTC’s switch from a trust to an exchange-traded fund.
“Greco noted that GBTC was not the only U.S. spot BTC ETF to attract investor capital last week.”
The pack of 11 funds issued by Grayscale, BlackRock, Fidelity, ARK 21Shares, Bitwise, Invesco Galaxy, VanEck, Valkyrie, Franklin Templeton, WisdomTree, and Hashdex amassed a cumulative $950 million in weekly net inflows, according to recent analytics.
Greco highlighted that the renewed interest buoyed Bitcoin’s price by 7% within the week, as the largest digital asset closed around $66,300. This followed a period of low daily volatility and five weeks of modest spot BTC ETF demand.
With a rebound in spot Bitcoin ETF inflows and Bitcoin’s price recovery, attention may also expand to spot Ethereum (ETH) ETFs. The U.S. SEC is scheduled to finalize its decision on filings from VanEck and ARK 21Shares on May 23 and May 24 respectively. Market participants expect the SEC to withhold approval for these products, despite approving BTC ETFs in January.
Concerns over the liquidity of ETH’s spot and futures markets, along with its previous classification as a security by the SEC, contribute to skepticism about swift approval. If rejected, issuers would need to resubmit filings, potentially leading to approval in Q4 2024 or Q1 2025 at best.
The SEC could also approve 19b-4 filings but delay greenlighting S-1s. 19b-4 forms are used to propose rule changes with the SEC, while S-1s represent registration statements required of firms before publicly offering securities.
The SEC must approve both forms before spot Ethereum ETFs can trade on U.S. national exchanges. If the SEC takes this route, the commission could use the time to further assess the Ethereum market and possibly conclude on ETH’s status as a security or not.
Stay updated with the latest developments in the cryptocurrency world by exploring more news on Global Crypto News.
