Grayscale to Expand Into Europe’s Competitive Crypto-Fund Market

(Bloomberg) -- Grayscale Investments LLC, which runs an almost $30 billion Bitcoin trust, is getting ready to expand into Europe, according to Chief Executive Officer Michael Sonnenshein. 

The company has yet to decide on which exchanges or in which countries it will offer products, or which offerings to launch first, Sonnenshein said in an interview in London on Tuesday. He added that he’s holding meetings with various local partners to discuss the timeline. Grayscale plans to run a series of pilot tests in different markets. 

Grayscale is entering a highly competitive market. There are more than 80 exchange-traded cryptocurrency products listed in western Europe with a combined $7.1 billion in assets, data compiled by Bloomberg show. Of the 60 launched before 2022, the median product has lost 25% year-to-date.   

“Although the EU is unified, we don’t view the entire European market as in fact one market,” Sonnenshein said. “Instead we’re going to be very thoughtful, very methodical about each of the financial centers and financial hubs that we ultimately launch in, because we recognize the differentiation of investor behaviors and attitudes, and of regulatory regimes.”

The expansion comes as the deadline nears for the U.S. Securities and Exchange Commission to approve Grayscale’s re-launched bid to convert the Grayscale Bitcoin Trust (ticker GBTC) into a physically-backed exchange-traded fund. While Europe has traded ETFs linked to the spot price of cryptocurrencies like Bitcoin and Ether for at least half a decade, the U.S. has yet to approve such a vehicle.

A U.S. approval for a spot Bitcoin ETF would likely accelerate flows into the crypto fund industry, with global assets doubling to $120 billion by 2028, according to a March analysis by Bloomberg Intelligence. 

©2022 Bloomberg L.P.