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Grayscale CEO: recent crypto sell-off hasn’t deterred investors


finbold.com 24 May 2022 11:05, UTC
Reading time: ~2 m

Despite the recent cryptocurrency market sell-off, optimism is still very high among some of the crypto’s top figures, including Mike Sonnenshein, the CEO of the crypto asset management company Grayscale. 

In an interview with Yahoo! Finance published on May 24, Sonnenshein said that crypto had to be examined “in the context of what has been happening in the broader markets.” He explained that the rising rates in the United States have caused a lot of volatility among different asset classes – crypto along with it. 

However, as he reasoned:

“The recent sell-off, though, from what we’re hearing from investors, has not deterred them. If anything, they’re looking at it opportunistically and a pullback like this is nothing new in the crypto space.”

In terms of alignment of crypto with other financial assets, Sonnenshein said that when looking at something like Bitcoin and something that feels and acts like digital gold:

“If you look out over a longer time horizon, you will see crypto being uncorrelated to other asset classes, although oftentimes it is scrutinized because we do only have the last 10+ years of trading history to really examine.”

Learning experiences

Commenting on the recent events concerning TerraUSD and LUNA, he said that they “really allowed a lot of investors to evaluate the stablecoin ecosystem as a whole. This is a very important component of keeping liquidity in the crypto space but avoiding having to go back to the traditional financial system.”

According to Sonnenshein, such events could lead investors to step back and examine other stablecoins like USD Coin (USDC) and others “and really just ensuring that they’re operating as they’re intended to do so.” On the other side of such events, in his words, is the fact that the crypto ecosystem is very resilient, “lessons are learned and we keep building,” actually coming out stronger.

Grayscale ETF future

Sonnenshein also touched upon the topic of an exchange-traded fund (ETF) that the company has been trying to get approved by the U.S. Securities and Exchange Commission (SEC), telling the interviewer that for over six years, his team has been investing its full resources behind the Greyscale Bitcoin Trust ticker GBTC converted to an ETF.

Ultimately, he believes that the SEC will do the right thing, especially considering how patient the investors have been and that they deserved a spot ETF. As a reminder, the SEC has been particularly critical of crypto companies and has even waged a legal battle against Ripple.


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