- Grayscale CEO Michael Sonnenshein predicts most of the 11 recently approved spot Bitcoin ETFs will fail long-term, with only 2-3 surviving due to lack of long-term commitment from other issuers.
- The spot Bitcoin ETF market has become highly competitive on fees, with many issuers lowering fees to 0.2-0.4% after SEC approvals. Sonnenshein defended Grayscale’s higher 1.5% fee.
- Opinions differ on ETFs’ long-term viability, with some saying self-custody will win out but ETFs allow new exposure for now. The future remains uncertain amid this rapidly changing market.
Most of the 11 recently approved spot Bitcoin ETFs likely won’t survive in the long run, according to Grayscale CEO Michael Sonnenshein. In a recent interview at the World Economic Forum, Sonnenshein argued that the majority of the SEC-approved ETFs will fail due to lack of long-term commitment.
The Fee War
The spot Bitcoin ETF market has become highly competitive on fees. Many issuers lowered fees to 0.2-0.4% and offered temporary fee waivers after the SEC approvals. Grayscale charges 1.5% without waivers. Sonnenshein defended the higher fees, stating that only 2-3 spot ETFs will remain, as the rest get pulled. He questioned other issuers’ long-term dedication to Bitcoin.
Contrasting Opinions
Some disagree with Sonnenshein. Quantum Economics’ Mati Greenspan said most ETFs may fail long-term as investors prefer self-custody. But for now, ETFs allow new exposure. Consolidation is likely given the 11 products. Cathie Wood of ARK Invest said self-custody and ETFs aren’t mutually exclusive. She noted ARK’s ETF isn’t for profit maximization.
The Future Outlook
It remains to be seen how many spot Bitcoin ETFs will survive long-term. While higher fees may not be sustainable, some argue lower fees aren’t the sole path to success. More developments are likely amid this rapidly evolving market.
