Head of crypto asset manager Grayscale Investments steps down

Michael Sonnenshein has stepped down as chief executive of Grayscale Investments, after more than a decade helping to establish the US group as one of the world’s largest cryptocurrency asset managers.

He will be replaced by Peter Mintzberg, global head of strategy for asset and wealth management at Goldman Sachs, in August.

Sonnenshein joined Grayscale in 2014 to help build up its bitcoin investment trust and had been chief executive since 2021. He was leaving to “pursue other interests”, the group said in a statement.

His departure comes as Grayscale faces fierce competition to dominate the emerging market for stock market-listed funds that invest directly in bitcoin.

Grayscale won a pivotal court victory last year that set the stage for the Securities and Exchange Commission to approve spot exchange traded funds in January, after a years of rejections.

Approval also allowed Grayscale to convert its bitcoin trust into an ETF but its head start, when it had $28bn of assets under management, has slowly been whittled away. Rivals such as Fidelity, Ark and BlackRock have undercut their rival on fees, and Grayscale’s charge of 1.5 per cent is the highest on the market.

Holders of the Grayscale ETF have withdrawn more than $17bn since January, and the assets under management have dropped to about $19.4bn, according to Morningstar. BlackRock’s bitcoin ETF has since grown to $18.4bn.

“Successfully winning a court case, the firm created a rapidly growing segment of the ETF market,” said Todd Rosenbluth, head of research at VettaFi, a consultancy. “However, strong competition from some of the biggest asset managers such as BlackRock and Fidelity has eroded Grayscale’s asset lead.”

The New York group said Edward McGee, chief financial officer, would lead the company until Mintzberg started on August 15.

“Peter is an exceptional strategic leader with global expertise across the most prominent asset managers, which are critical ingredients as we position Grayscale for its next phase of growth,” said Barry Silbert, chief executive of Digital Currency Group, which owns Grayscale. He was not available for an interview on Monday.

“This is an exciting time in Grayscale’s history as it continues to capitalise on the unprecedented momentum in the asset class,” Mintzberg said in a statement.

Sonnenshein said in a LinkedIn post that he was leaving “with deep gratitude for everyone who has been on this incredible rocket ship journey” and was “excited for what’s next”.

Grayscale also runs a $9bn ethereum trust and is one of several asset managers seeking to launch an ethereum ETF. The SEC faces deadlines this week to decide whether to approve two of those ethereum ETF applications.