Notes

Grayscale's Future After CEO Resignation
On the platform Coinatory, Grayscale Investments CEO Michael Sonnenshein has stepped down amid significant investor withdrawals from the firm’s flagship GBTC ETF . This move, reported on May 20 by the Wall Street Journal, Peter Mintzberg will assume the role of CEO in August. Mintzberg, a veteran in the financial industry, brings decades of expertise, having previously led strategy for Goldman Sachs’s asset management division.


Grayscale has not yet provided a response on requests for commentary from crypto.news. The timing of this leadership shift aligns with a notable shift in patterns for Grayscale’s GBTC fund, which noted its first weekly net inflows in nearly 19 weeks. According to Ethereum ETF market impact , GBTC recorded $31.6 million in net inflows between May 13 and May 17.


Despite this positive development, these inflows are minimal compared to the approximately $17.6 billion in exits since January, following the U.S. Securities and Exchange Commission (SEC) approval of spot Bitcoin (BTC) ETFs. The impact of these investor exits on Sonnenshein’s decision to resign remains unclear. However, it is known that Grayscale experienced a decrease in 50% of its assets under management within six months of GBTC’s transition from a trust to an exchange-traded fund.


Spot Bitcoin ETFs Attract Significant Inflows
Last week, spot Bitcoin ETFs collectively recorded $950 million in net inflows, with 11 funds issued by firms including Grayscale, BlackRock, Fidelity, ARK 21Shares, Bitwise, Invesco Galaxy, VanEck, Valkyrie, Franklin Templeton, WisdomTree, and Hashdex, according to SoSoValue analytics.


Greco highlighted that this renewed interest drove up Bitcoin’s value by 7% over the week, bringing it to around $66,300. This uptick follows five weeks of lower demand and low daily volatility for spot BTC ETFs.


Potential for Spot Ethereum ETF Approvals
As spot Bitcoin ETF inflows rise and Bitcoin's price recovers, attention is turning to spot Ethereum (ETH) ETFs. The U.S. SEC is set to make decisions on filings from VanEck and ARK 21Shares on May 23 and May 24, respectively. Greco suggested that market participants anticipate the SEC to delay approval for these products, despite having approved BTC ETFs in January.



Concerns about the liquidity of ETH’s spot and futures markets, along with its classification as a security by the SEC, contribute to skepticism regarding a swift approval. Rejected filings would mean resubmissions, possibly delaying approval until late 2024 or early 2025.


Alternatively, the SEC might greenlight the 19b-4 filings, which suggest regulatory amendments , while delaying the S-1 registration statements required before marketing securities. Both approvals are necessary for spot Ethereum ETFs to trade on U.S. national exchanges. Greco noted that this delay could give the SEC an opportunity to continue analyzing the Ethereum market and determine its official position on ETH’s status as a security.



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