Micheal Sonnenshein’s Vision for 2021
Michael Sonnenshein, at the forefront of digital assets as the new CEO of Grayscale Investments, is ready to dive into the investment deep end this year. He believes that when it comes to digital assets, 2021 isn’t just another year—it’s the year where institutional capital and nation-state buy-in push us into a bullish frenzy, yet again.
Key Themes from 2020: Lessons Learned
During his keynote speech at the virtual CFC St. Moritz Conference, Sonnenshein drew attention to three pivotal investment themes that led to Bitcoin’s explosive growth in 2020:
- Macroeconomic uncertainty driving quantitative easing.
- High-profile investors and reputable companies jumping on the Bitcoin bandwagon.
- A robust and evolving regulatory framework surrounding digital assets.
These aren’t just trends; they’re trends with teeth. As we gear up for 2021, these themes are expected to roll over into the current year, but with extra seasoning.
Six Investment Themes to Watch in 2021
Sonnenshein highlighted six themes for investors to keep an eye on in 2021 that could shake things up in the digital currency space:
- Less career risk tied to digital asset investments—finally giving that 9-to-5 a little less of a headache.
- Growing interest from financial advisors who are starting to embrace Bitcoin like it’s hot.
- Expansion of North American and clean-energy crypto mining—Mother Earth would approve!
- Deeper integration of stablecoins—because who wants their crypto to be as unstable as a toddler on a sugar rush?
- Nation-states getting cozy with digital assets—think Central Bank Digital Currencies (CBDCs) and maybe even some governments adding Bitcoin to their reserves as a “just in case” fund.
- Significant regulatory changes that could provide clarity and credence to the market.
These are the factors that may ultimately propel Bitcoin and other digital currencies into the spotlight.
The Miners’ Impact: Foundry Leading the Charge
Discussing the role of cryptocurrency miners, Sonnenshein pointed out that Foundry, a sibling company of Grayscale, is now the leading miner in North America. If that doesn’t sound like a power play, we don’t know what does. Digital Currency Group is backing this endeavor, injecting $100 million into North American crypto mining. Talk about putting your money where your mouth is!
Grayscale’s Growing Influence: The Bellwether Effect
Grayscale is not just a participant; it’s a trendsetter. At the start of 2020, the firm managed assets worth $2 billion and closed out the year with a jaw-dropping $20 billion. As of January 19, 2021, that figure had climbed even higher, hitting $28.1 billion! With Grayscale holding around 3% of Bitcoin’s circulating supply, they have a gravitational pull on BTC’s price so substantial that analysts from JPMorgan Chase are spotlighting them as a crucial component for Bitcoin’s future, aiming for that enticing $40,000 mark.
In a nutshell, to hit that price, Grayscale’s buying spree would need to maintain an impressive pace of $100 million per day. Only time will tell if they can keep it up!
