Grayscale switches CEO following $144 million reduction in fees as Bitcoin outflows finally subsiding

Grayscale Investments, the world’s largest crypto asset manager, announced the appointment of Peter Mintzberg as its new Chief Executive Officer, effective August 15, 2024. Mintzberg will succeed Michael Sonnenshein, who stepped down from the position after a decade with the firm to pursue other interests.

During his tenure as CEO, Sonnenshein guided Grayscale from $60 million to approximately $30 billion in assets under management. Notably, Sonnenshein oversaw Grayscale’s historic court victory against the Securities and Exchange Commission, which enabled the firm to uplist the first spot Bitcoin ETF to NYSE Arca.

Sonnensheinn led Grayscale Bitcoin Trust to acquire 624,000 BTC before shepherding it through its transition to a spot Bitcoin ETF in January this year. As of his resignation today, Grayscale’s Bitcoin has fallen to 290,000 BTC, although its dollar value decline was limited to $9.6 billion due to Bitcoin’s meteoric price surge from $46,000 to $67,000.

With a 1.5% management fee on its Bitcoin, this drop equates to a reduction of roughly $144 million per year in fees for Grayscale. However, with its current assets under management of approximately $19.4 billion, current fee estimates come to around $290 million annually. Over the past few weeks, outflows have begun to subside, with some days of positive inflows into the fund.

In a series of posts on X, Sonnenshein expressed his gratitude for his time at Grayscale and thanked the founder and CEO of Digital Currency Group, Barry Silbert, for his partnership over the last ten years. “What we’ve achieved together is nothing short of remarkable,” Sonnenshein wrote, addressing the Grayscale team. Keep building. To the moon 🚀.”

Silbert also took to X to announce the leadership change, highlighting Mintzberg’s 20+ years of experience across prominent asset managers, including Goldman Sachs, BlackRock, OppenheimerFunds, and Invesco. “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 growth phase,” Silbert said in the press release.

Mintzberg joins Grayscale when the crypto asset class is at a critical inflection point. “I’ve long admired Grayscale’s position as the leading crypto asset management firm, and I am honored to join the most talented and pioneering team in the business,” Mintzberg said.

In recent weeks, Grayscale has seen a reduction in outflows from its GBTC ETFs, signaling a potential shift in investor sentiment. As the firm continues to expand its future-forward investment product suite, Mintzberg’s appointment is expected to position Grayscale for its next growth phase.

Over the last decade, Grayscale has launched nineteen crypto investment products, enabling access to the crypto asset class in a familiar, transparent wrapper. The firm has also served as an educational resource to the investing public, working with policymakers and regulators to bring digital assets further into the regulatory perimeter while growing its business capabilities and best-in-class team.

As Grayscale navigates this leadership transition, Chief Financial Officer Edward McGee will assume the role of principal executive officer in the intervening period, responsible for leading the firm until Mintzberg takes the helm in August.

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