On January 11, Grayscale launched the first spot Bitcoin ETF in the United States. With the cryptocurrency now having some semblance of regulation, it may attract investors who were previously hesitant about entering the crypto market. Grayscale CEO Michael Sonnenshein joined TheStreet to discuss why he believes this development will convert skeptics into believers.
Full Video Transcript Below:
J.D. DURKIN: According to a Pew Research poll from April of last year, 75% of Americans who have heard of cryptocurrencies say I’m not necessarily confident in the overall safety, the overall security. Is a part of your calculus here, Michael, that you want to reach those people that still may be on the sidelines with a bit of skepticism off of so many other headlines unrelated to your company they’ve seen in the last few years or are you really trying to stay targeted to people who are already in the game and now looking for a bit more institutional backing?
MICHAEL SONNENSHEIN: Well, I think what’s so exciting about having Bitcoin exposure through the protections of the ETF wrapper is that this is actually going to hopefully convert some of those skeptics, right? They’ve been looking for more regulatory clarity. They’ve been looking for reporting, tax reporting, disclosure, all the things that come with being an ETF. But Bitcoin’s not for everyone, right? I’m not going to sit here and tell you that every single American is going to be investing in Bitcoin.
It is volatile, it is relatively new. The asset class has only been around for a little bit over a decade. And so for certain investors, if you have the appropriate risk tolerance, the appropriate time horizon, we could see investors who don’t already have exposure either scaling into having a position, maybe it’s 25 basis points, maybe it’s 100 basis points on the more aggressive end, maybe it’s 500 basis points. And for other investors who might already be in the space, I think for them, this is a real moment of validation that all their friends and family and coworkers who said they were nuts to be investing in bitcoin, it was a passing fad. It was going to go away. Well, now I think many of them probably feel quite vindicated.