Grayscale is open to M&A-related opportunities, firm’s CEO says

Crypto asset manager Grayscale Investments has been fielding calls related to mergers and acquisitions following its high-profile legal win against the Securities and Exchange Commission last year.

When asked during an interview with CNBC’s Andrew Ross Sorkin whether Grayscale would still be an independent company in two years, Grayscale CEO Michael Sonnenshein said his firm is open to considering deals.

“Our eyes and ears are open, and sometimes people are approaching us about strategically working together,” Sonnenshein told CNBC. “But nothing to announce this morning.”

Big financial players like BlackRock are further wading into the crypto space, Sorkin noted. Grayscale is a giant of sorts in the segment, with roughly $23 billion of assets under management in its Bitcoin Trust ETF (GBTC) alone.

Still, GBTC’s asset base has shrunk in recent weeks, while more money has gravitated to lower-cost spot bitcoin ETFs by BlackRock, Fidelity and others.

Carrying a fee of 1.5%, GBTC has seen about $7.3 billion in net outflows over the last six weeks. The nine other spot bitcoin ETFs have tallied collective net inflows of roughly $12.6 billion.

“Would it make sense for you to be with somebody else?” Sorkin posed.

“It could,” Sonnenshein said. “I’d be lying if I didn’t say that those types of conversations and those opportunities over time have started to present themselves at Grayscale.”

A Grayscale spokesperson did not immediately return a request for further comment.

Sonnenshein said the broader investment community took notice of Grayscale’s court victory over the SEC in August.

DC Circuit Court of Appeals judges ruled that the SEC’s decision to approve bitcoin futures funds, but not Grayscale’s proposed conversion of its Bitcoin Trust (GBTC), was “arbitrary and capricious.”

The ruling, which the SEC chose not to appeal, essentially prevented the SEC from denying spot bitcoin ETFs under reasons it had given in the past.

The SEC ultimately approved spot bitcoin ETFs on Jan. 10. SEC Chair Gary Gensler said in a statement at the time that the approval was “the most sustainable path forward” given the court’s decision on the Grayscale matter.

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