coindesk.com
Amid rising interest rates in the U.S. market, asset classes across the board are seeing selling pressure, and cryptocurrencies are no exception.
What’s more, events like the collapse of terraUSD’s (UST) stablecoin could be adding to crypto’s recent pullback, but one asset manager sees the digital currency’s rebound sometime soon.
“I think in the near term, we [crypto] will find our footing,” Grayscale Investments CEO Michael Sonnenshein, said on CoinDesk TV’s “First Mover.”
Grayscale, one of the largest players in crypto and sister company to CoinDesk, has over $25 billion in assets under management.
Sonnenshein also noted that following the collapse of UST, one of the largest algorithmic stablecoins, stablecoins remain a concern in the ecosystem even as they remain the backbone of the crypto markets.
“Investors are focusing on items like stablecoin governance, supply collateral and over time ensuring that the stablecoins they are involved with are in fact functioning the way they’re designed to do so,” he said.
Much to the detriment of its investors, tech stocks have also suffered low trading volumes and selling pressure. Since the start of 2022, bitcoin (BTC) has fallen by more than 35%.
Yet Sonnenshein doesn't see the downturn lasting. Like many in the crypto asset world, he sees a potential for a future upside.
“I think that markets will continue to find their footing,” he said.
GBTC, the company’s flagship investment vehicle that it hopes to one day get permission to turn into an exchange-traded fund (ETF), is trying to attract those investors and is hoping that the Securities and Exchange Commission gives them approval. GBTC is currently trading at a discount of around 30% of its net asset value.
Ultimately, Sonnenshein cites a “function of market forces,” including a liquidity crunch, that are contributing to GBTC and bitcoin’s trading price.