Michael Sonnenschein attends the 2022 Forbes Iconoclasm Summit held at the New York Historical Society on November 3, 2022.
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DAVOS, Switzerland — Michael Sonnenshein, CEO of Grayscale Investments, told CNBC: largely [says all 11 in the headline, summary and key point though] Some of the approved Bitcoin exchange-traded funds will not survive, while adhering to the highest fees on the market for their products.
The Grayscale Bitcoin Trust ETF is the largest in the world, with over $25 billion in assets under management.
When the U.S. Securities and Exchange Commission approved a broad-based Bitcoin spot ETF earlier this month, much attention was focused on the management fees charged by companies from BlackRock to Fidelity.
Many ETF issuers charged 0% fees for a limited period of time before raising prices slightly. Most approved ETFs charge fees between 0.2% and 0.4%.
However, the Grayscale Bitcoin Trust ETF has a 1.5% fee.
Sonnenschein gave several reasons for charging the fee, including that the fund is the largest Bitcoin fund, has a 10-year track record of “successful operations,” and has a diverse investor base. did.
“Investors care about things like liquidity, track record, and who the actual issuer is behind the product,” Sonnenschein said in an interview with CNBC. But it's really paved the way for a lot of these products to come into circulation.” at the World Economic Forum in Davos on Thursday.
Sonnenschein said other ETFs have lower fees because the products “don't have a track record” and because issuers are trying to attract investors with fee incentives.
“From our standpoint, I think there are times when you question their long-term commitment to this asset class,” Sonnenschein said.
Grayscale's CEO said two to three Spot Bitcoin ETFs “may get some sort of critical mass” of assets under management, but the rest could be pulled out of the market. He said there is.
“Ultimately, I don't think we'll end up having these 11 spot products on the market,” Sonnenschein said.
