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In a recent interview with Bloomberg, Grayscale CEO Michael Sonnenshein shared some interesting insights into the behavior of crypto investors. He also addressed questions related to volatility and market fears that affect all asset classes including cryptocurrencies.
Grayscale CEO Michael Sonnenshein Talks About Crypto Investors
Sonnenshein was asked about volatility in the crypto markets right off the bat. Bloomberg specifically asked for his reaction to critics that disputed Bitcoin’s position as a store of value. In his response, Sonnenshein stated that digital asset investors are well aware that volatility is a part of the market.
“Most of the investors we’re dealing with are not looking at short-term price movements or short-term volatility. Their crypto allocations are really over medium to longer-term time horizon,” he said.
Furthermore, the Grayscale CEO argued that most medium and long-term investors aren’t bothered by dramatic movements in the market because they are accustomed to fluctuating prices.
Cryptocurrencies As a Means for Diversification
During the interview, Sonnenshein also underlined crypto’s role in helping investors diversify their portfolios. He said that digital assets are a “diversification play” and a “differentiated return stream” for many investors.
However, he also reminded the viewers that market declines have an equal impact on all asset classes, and in that respect, cryptocurrencies are no different. When investors express fear no asset can “avoid some of the liquidity coming out of the market.”
Sonnenshein also spoke about investors’ inclination towards adding different digital currencies to their portfolios. He suggested that growing interest in emerging use cases of crypto-asset protocols could explain investor urge for diversification.
Grayscale’s Decentralized finance (DeFi) Fund
Bloomberg and Sonnenshein also touched upon decentralized finance (DeFi) and Grayscale’s newly launched DeFi fund that will allow institutional investors to gain exposure to some of the top protocols in the sector.
Sonnenshein noted that DeFi represents “a new subset of assets” in the crypto industry and investors are keen on getting involved with them. He is also not worried that the new product would bite into the market share of Grayscale’s existing offerings, which currently stand at a total of 15 funds.