- Grayscale CEO Michael Sonnenshein predicts that most of the 11 recently approved Bitcoin ETFs won’t survive, defending Grayscale’s own high fees for the world’s largest Bitcoin Trust ETF.
- Sonnenshein attributes the lower fees of other ETFs to a lack of track record, suggesting potential doubts about their long-term commitment to the cryptocurrency asset class.
In the rapidly evolving landscape of Bitcoin exchange-traded funds (ETFs), Grayscale Investments CEO Michael Sonnenshein has voiced a bold prediction — most of the 11 recently approved Bitcoin ETFs won’t survive. This revelation comes as Grayscale’s own product, the Grayscale Bitcoin Trust ETF, stands as the world’s largest, boasting over $25 billion in assets under management.
The key focal point surrounding the approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission has been the management fees imposed by various firms, ranging from industry giants like BlackRock to stalwarts like Fidelity. Many ETF issuers initially attracted attention by offering 0% fees for a limited time, later incrementally raising them. Notably, most approved ETFs settle within the 0.2% to 0.4% fee range.
Contrastingly, Grayscale’s Bitcoin Trust ETF sets itself apart with a substantial 1.5% fee. Sonnenshein staunchly defended this decision, citing the fund’s standing as the largest in the Bitcoin space, backed by a decade-long track record of successful operation and a diversified investor base.
“Investors are weighing heavily things like liquidity and track record and who the actual issuer is behind the product. Grayscale is a crypto specialist. And it has really paved the way for a lot of these products coming through,” Sonnenshein explained during an interview at the World Economic Forum in Davos.
Sonnenshein attributed the lower fees of other ETFs to their lack of track record, suggesting that issuers are employing fee incentives to attract investors but raising questions about their long-term commitment to the asset class.
According to Sonnenshein, only two to three of the approved spot Bitcoin ETFs may achieve critical mass in terms of assets under management, casting doubt on the viability of the remaining products in the market. He stated, “I don’t ultimately think that the marketplace will have ultimately these 11 spot products we find ourselves having.”
As the Bitcoin ETF landscape continues to unfold, Grayscale’s CEO offers a unique perspective, challenging conventional expectations and cautioning investors about the potential pitfalls that may await the majority of recently approved ETFs. In a market where fees and sustainability are paramount, navigating these uncharted waters requires a careful evaluation of each fund’s track record and commitment to the ever-evolving crypto landscape.
