Michael Sonnenshin, CEO of Grayscale, says institutional demand for bitcoin (BTC) only increased in 2021 after a record year when Grayscale’s assets under management soared to new heights.
Sonnenstein told Squawk Box on CNBC on Feb.10 that the streams of recordings have continued over the past year, and she interpreted this as an indication that the current Bitcoin rally could continue.
Contrary to reports released by government agencies, Sonnenstein says the regulation is not a concern for potential investors, many of whom have argued that they are happy to provide sufficient regulatory clarity.
Sonnenstein said: “The first point of the conversation starts with organizational issues, and in fact, many of these conversations are characterized by the absence of organizational issues. Many people who make decisions about this know how much organizational clarity has been given about this. … ”
In the same week that Tesla invested $ 1.5 billion in bitcoin, Sonnenstein says that most institutional investors will happily acquire bitcoin over time, rather than throwing all their eggs in one basket.
“I think the second part of the conversation is about size and timing. So you can see that companies think anywhere from the low end of 25 basis points to the high end of maybe 100 or 200 basis points over time. And they understand that they are not. need to. “For a one-time investment.”
For context, Tesla recently invested about 770 basis points, or 7.7% of its total cash holdings, in bitcoin. Sonnenstein said MicroStrategy’s investment strategy may be more typical of future buyers. MicroStrategy acquired $ 1 billion of bitcoin during 2020.
“They’ve seen other companies like MicroStrategy get involved in this deal over time, and they ultimately believe in its growth. Therefore, buying bitcoins, whether here 10% higher or 10% lower, in the end would not mean anything if they thought Bitcoin would see the growth they thought would happen over time. ”
According to Sonnenstein, the Bitcoin question changes from “Why?” “Why not?” This is where the leaders of large tech companies such as Tesla and Twitter flock to the cryptocurrency market. Sonnenstein believes that more “dreamers” will follow people like Elon Musk when they buy bitcoins. He said:
“I wouldn’t be surprised to see that now it’s almost a kind of race – you have Elon Musk, you have Michael Sailor, Jack Dorsey. You will see that many other forward-thinking leaders of disruptive companies do understand that they have truly gone from “why” to “why not,” knowing that the next companies will own bitcoin as part of their Treasury program.
All signs for 2021 are looking good, Sonnenschen said, and institutional currents have already gained momentum since the start of the new year.
“If flows are indicative of investor interest in the aftermath of a record-breaking 2020, I am very pleased and encouraged that this momentum is not just continuing this year, it is actually accelerating. One of the institutional players At the moment. “