Grayscale Investments CEO Michael Sonnenshein has expressed skepticism about the survival of most approved bitcoin exchange-traded funds (ETFs) in the market. While defending Grayscale Bitcoin Trust ETF, the world’s largest with over $25 billion in assets under management, Sonnenshein pointed out that the approved ETFs have varying fees, with many charging lower fees initially to attract investors.
Grayscale Bitcoin Trust ETF, in contrast, charges a 1.5% fee. Sonnenshein justified this higher fee by highlighting the fund’s position as the largest bitcoin fund, its 10-year track record of successful operation, and a diversified investor base. According to Sonnenshein, investors consider factors such as liquidity, track record, and the issuer’s expertise when choosing a product. Grayscale, being a crypto specialist, has played a crucial role in the development of such products.
Sonnenshein suggested that other ETFs with lower fees may lack a track record and are using fee incentives to attract investors, raising questions about their long-term commitment to the asset class. He predicted that only two to three of the recently approved spot Bitcoin ETFs might achieve critical mass in terms of assets under management, while others might be withdrawn from the market.
These comments reflect the evolving dynamics in the cryptocurrency investment space, especially concerning the growing popularity of Bitcoin ETFs. Investors are carefully considering various factors, including fees, track record, and issuer expertise, as they navigate the expanding landscape of cryptocurrency investment options.