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Grayscale Investments, which makes cryptocurrencies like Bitcoin available to investors in the form of stocks, announced on Thursday that longtime chief executive Michael Sonnenshein has taken on the role of chief executive.
The move comes in the middle of a remarkable bull run for cryptocurrencies which saw Bitcoin eclipse $ 35,000 this week. The sudden rise helped Grayscale growth from $ 2 billion in assets under management at the start of 2020 to more than $ 20 billion today.
‘The PIMCO of crypto’
Grayscale sculpted a lucrative niche for itself by wrapping the cryptocurrencies as shares in a trust and then selling those shares to wealthy individuals and institutions, some of whom face legal hurdles to directly owning cryptocurrencies. Those who buy shares of the trust can sell them to the general public at a later date, often for a healthy mark-up.
In recent years, Sonnenshein has played a pivotal role in attracting new investors and expanding Grayscale’s offering from a single Bitcoin trust to 10 different offerings. In an interview with Fortune, Sonnenshein said it plans to introduce more new products in the coming year and further strengthen Grayscale as a brand.
“I want Grayscale to be synonymous with digital investing, like PIMCO is with fixed income and Vanguard with index funds,” he said.
Grayscale has gained attention over the past year with a nationwide television advertising campaign that has encouraged investors to “drop of gold”In favor of Bitcoin. The company also found a special deal with millennials. 2019 survey by Charles SchwabGrayscale’s Bitcoin Trust was among the five most popular stock picks in this group, ahead of familiar names like Netflix.
The Coinbase question
Sonnenshein’s rise to a leading role at Grayscale is notable in part because his background is in mainstream finance. He started his career in investment banking JP Morgan, which contrasts with many other influential figures in the crypto world, who have appeared in Silicon Valley or in hacker circles.
Sonnenshein takes over as CEO of Barry silbert, the founder of Grayscale. Silbert will continue to chair Grayscale’s parent company, Digital Currency Group (DCG), a sprawling conglomerate whose other properties include media company Coindesk and a new crypto-mining company called Foundry.
Silbert says he’s switching the role of CEO from Grayscale to Sonnenshein in part because of the rapid growth of Grayscale and DCG, which he says will announce a new subsidiary in the near future. He also predicted a turbulent 2021 for crypto.
“All eyes are on the Coinbase IPO, which will lead to price reviews for many companies in the industry and speed up mergers and acquisitions,” said Silbert, referring to Coinbase’s recent announcement, the most big american cryptocurrency exchange Go in public.
It is not yet clear how long the current bull market, which has seen the price of Bitcoin rise more than five times since March, can continue. The crypto market has dramatically imploded several times in the past – most recently in 2018 – and is currently facing meticulous examination US regulators.
Sonnenshein said he was not taken aback by the prospect of a price or regulatory crisis, noting that Grayscale has resisted such events in the past. He predicted the current rally could gain momentum in 2021 as more large companies look to add crypto-currencies to their balance sheets.
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