Grayscale Replaces CEO as GBTC Bleeds Assets

Grayscale Replaces CEO as GBTC Bleeds Assets

Goldman Sachs's Peter Mintzberg takes over Aug. 15; GBTC has lost more than $17b since the ETF began trading in January

Jeff_Benjamin
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Wealth Management Editor
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Reviewed by: etf.com Staff
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Edited by: Ron Day

Grayscale Investments Chief Executive Officer Micheal Sonnenshein has stepped down after more than 10 years at the cryptocurrency investment firm as its flagship fund, the Grayscale Bitcoin Investment Trust, experiences billions in outflows while investors flee to cheaper spot bitcoin exchange-traded funds.

Sonnenshein stepped down “to pursue other interests,” according to a company announcement.

The Stamford, Conn.-based company is bringing on Peter Mintzberg from Goldman Sachs as the new CEO. Mintzberg, who is currently Global Head of Strategy for Asset Management at Goldman, will officially join Grayscale on Aug. 15, according to the announcement.

In the interim period, Grayscale’s Chief Financial Officer Edward McGee will assume the role of principal executive officer in charge of the firm.

Mintzberg, who has more than 20 years’ experience in financial services, will join a company that has been bleeding assets from its flagship Grayscale Bitcoin Trust ETF (GBTC) ever since the SEC approved 11 spot bitcoin ETFs in early January.

GBTC's $17B Outflows

GBTC, which peaked at more than $40 billion in November 2021 when it was a closed-end trust, has been hit by more than $17 billion worth of outflows this year.

The GBTC saga stands in stark contrast to the steady inflows into the spot bitcoin ETFs launched on Jan. 11, which are led by the iShares Bitcoin ETF (IBIT) that set a record in February by reaching the $10 billion mark faster than any other ETF.

In mid-March Sonnenshein told CNBC the company had plans to trim the 1.5% expense ratio on GBTC, which has not yet been adjusted and remains by far the highest among the dozen bitcoin ETFs.

The expense ratio was cut from 2% when the fund was converted to a spot bitcoin ETF, but at 1.5% GBTC is still at least five times more expensive than its competitors.

“The misread here by Grayscale was that 1.5% would seem so high,” said Bloomberg Intelligence ETF analyst Eric Balchunas, who speculated that Grayscale was comparing its fees to Europe and Canada but overlooked the pressure for lower fees in the U.S. ETF market.

“They probably should have lowered the expense ratio in increments,” he said. “But as recently as late 2023, I don’t think they anticipated how bad the outflows would be.”

In terms of Sonnenshein’s sudden departure, Balchunas compared it to a coach taking the fall for a team’s poor performance.

“It feels like they just want a fall guy and the head coach had to go,” he said. “The outflows have been heavy and well publicized, but obviously the board and upper management approved the fee.”

Despite the steady outflows, GBTC has been riding the bitcoin rally this year with the ETF up more than 72%.

Grayscale did not respond to a request for comment Tuesday morning.

As part of the announcement, Barry Silbert, founder and CEO of Digital Currency Group, the venture capital parent company of Grayscale, described Mintzberg as an “exceptional strategic leader with global expertise across the most prominent asset managers, which are critical ingredients as we position Grayscale for its next phase of growth.”

Silber’s statement also acknowledged Sonnenshein, who joined Grayscale in 2014 and served as CEO since 2021.

“Michael guided Grayscale from $60 million to $30 billion of assets under management and through its historic court victory against the Securities and Exchange Commission, which enabled Grayscale to uplist the first spot bitcoin ETF … we wish him the best,” Silbert said.

Jeff Benjamin is the wealth management editor at etf.com, responsible for coverage related to the financial planning industry. This includes writing, hosting podcasts, webinars, video interviews and presenting at in-person events.


Jeff is a veteran journalist with more than 30 years’ experience covering the financial markets. He has won more than two dozen national and regional awards for his reporting. He most recently worked as a senior columnist at InvestmentNews where he wrote about investment products and strategies, as well as the broader financial planning industry. Prior to that, Jeff worked as an analyst at Cerulli Associates where he researched and wrote reports on the alternative investments industry. Jeff also worked as a money management reporter at Dow Jones Newswires, where he covered the mutual fund industry.


Based in North Carolina, Jeff is a former Marine and has a bachelor’s degree in journalism from Central Michigan University.