Grayscale Investments, an asset manager specializing in cryptocurrency trusts, has appointed a new CEO as the firm’s assets under management explodes, having grown 500% in six months.
Managing director Michael Sonnenshein takes the reins as CEO as the company’s flagship Grayscale Bitcoin Trust purchased nearly 73,000 bitcoins in December, more than 2.5 times the total number of BTC mined that month.
It has been suggested that this accounts for a substantial part of bitcoin’s meteoric price rise in the past few months.
Grayscale Investments had $22.8 billion in asset under management in its 10 single-asset trust and multi-asset fund products as of Jan. 4. On July 15 of last year, it reported $4.1 billion AUM.
By placing cryptocurrencies in trusts, Grayscale makes them accessible to institutional investors who would not otherwise be able to buy them, such as 401k retirement accounts.
Calling the firm “a leading indicator for the growth of digital currency investments as a whole,” in a Jan. 7 announcement, Sonnenshein said:
“This was never more clear than in 2020, when we saw many of the world’s largest institutions and most influential investors allocating to the asset class for the very first time, and doing so through Grayscale.”
The Grayscale Bitcoin Trust is by far its largest, accounting for $19.1 billion of its assets. It also has trusts for bitcoin cash (BCH), ethereum (ETH), ethereum classic (ETC), horizen (ZEN), litecoin (LTC), Stellar lumens (XLM), and zcash (ZEC). It’s Grayscale Digital Large cap fund holds BTC, BCH, ETH, and ETC.
The company also has a Grayscale XRP Trust, which was closed to new private placements following the Securities and Exchange Commission’s Dec. 22 lawsuit against Ripple, which called the fourth-largest cryptocurrency an unregistered security.
“The creation of an entirely new asset class is what many would call a once-in-a-generation event,” Sonnenshein said. “[I]n the case of digital currencies, I have been incredibly fortunate to have experienced not only their emergence, but also to be leading the firm trailblazing their introduction to investors.”
He also told news outlet Fortune that he plans to launch new products. He said:
“I want to make Grayscale synonymous with digital investing like Pimco is with fixed income and Vanguard is with index funds.”
Before joining Grayscale, Sonnenshein began his career at major United States investment bank JPMorgan. Analysts there recently predicted that Bitcoin could eventually reach over $146,000, but not in the short term.
Grayscale wasn’t the only digital asset investment firm seeing rapid growth this year.
As Modern Consensus recently reported, cryptocurrency index fund provider Bitwise Asset Management just exceeded $500 million in assets under management, a fivefold increase in just a few months.
This investor appetite also tempted another player to attempt to launch a new cryptocurrency-based tradable product believed to be much more important than those, as it would be available to individual investors.
Earlier this month, investment management firm VanEck filed with a U.S. regulator to launch a Bitcoin exchange-traded fund. While no such product has been approved so far, there are hopes that the departure of SEC Chairman Jay Clayton last month removed a key hurdle.
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