Digital greenback might push extra folks into bitcoin, fund supervisor says
A digital dollar won’t doom bitcoin, according to two cryptocurrency fund managers.
As central banks around the world consider digitizing their fiat currencies, the trend could actually push more investors into crypto, Grayscale’s Michael Sonnenshein and Osprey Funds’ Greg King told CNBC this week.
“That will not displace or, if anything, take market share or compete with decentralized currencies like bitcoin,” Sonnenshein, the CEO of Grayscale, said in a Monday interview on CNBC’s “ETF Edge.”
“I think it all trends towards the digitization of money and something that investors and just your average person … who may not be in the investment market can glom onto as well,” Sonnenshein said.
Grayscale runs the largest bitcoin-based fund in the world, the Grayscale Bitcoin Trust (GBTC), with over $24 billion in assets under management.
While bitcoin has yet to establish itself broadly as a payment mechanism, its role as a store of value may only strengthen with the introduction of government-backed digital currencies, said King, the founder and CEO of Osprey, another bitcoin fund provider.
“Imagine the world’s fiat currencies are digitized. I actually think that pushes more people into something like a bitcoin because, frankly, that would give governments even more control than they already have around their money supply, and a lot of people get into bitcoin for concerns about that type of control,” he said in the same “ETF Edge” interview.
In addition to the Osprey Bitcoin Trust (OBTC), King’s firm also runs the Osprey Algorand Trust, based on a technology that supports numerous central bank digital currency projects.
With global adoption picking up, bitcoin appears to have a strong year ahead of it, both CEOs said.
“I am as encouraged as I’ve ever been by who’s participating in the ecosystem and the extent to which they’re participating in the asset class,” Sonnenshein said. “What that ultimately means for the price remains to be seen, but I think the institutionalization of this asset class has arrived and it’s here to stay.”
King expected what he saw as a “bull market” in bitcoin to persist.
“We think it’s going to be higher,” King said. “I would say it breaks decisively upward through 40,000, then it’s going to keep going. If it breaks to the downside, we could be in for some trouble. My view is that it’s bullish. But we take the mid to long-term view anyway, so, this represents a good buying opportunity in my book.”
Bitcoin traded nearly 2% higher on Friday.