Digital greenback may push extra folks into bitcoin, fund supervisor says

A digital dollar won’t ruin Bitcoin, according to two cryptocurrency fund managers.

As central banks around the world consider digitizing their fiat currencies, the trend could actually drive more investors into crypto, Grayscale’s Michael Sonnenshein and Osprey Funds’ Greg King told CNBC this week.

“That will not displace market share or, if at all, compete with decentralized currencies like Bitcoin,” said Sonnenshein, CEO of Grayscale, in a Monday interview in CNBC’s “ETF Edge”.

“I think they are all trends towards the digitization of money and something that investors and the average person … who may not be in the investment market can also stare at,” said Sonnenshein.

Grayscale operates 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 largely as a payment mechanism, its role as a store of value could only be strengthened with the introduction of government-backed digital currencies, said King, the founder and CEO of Osprey, another provider of bitcoin funds.

“Imagine that the world’s fiat currencies are digitized. I actually think that is pushing more people into something like bitcoin because it would, frankly, give governments even more control than they already have over their money supply. Concerns about this type of control, “he said in the same” ETF Edge “interview.

In addition to the Osprey Bitcoin Trust (OBTC), King’s company also operates the Osprey Algorand Trust, which is based on a technology that supports numerous digital currency projects at central banks.

With increasing global adoption, Bitcoin appears to have a strong year ahead of it, both CEOs said.

“I am more encouraged than ever before to see who participates in the ecosystem and to what extent they participate in the asset class,” said Sonnenshein. “What that ultimately means for the price remains to be seen, but I think the institutionalization of this asset class has arrived and will remain.”

King expected what he viewed to be the “bull market” in Bitcoin to continue.

“We think it will be higher,” said King. “I would say it breaks decisively up through 40,000, then it will go on. If it breaks down, we could get into trouble. I think it is bullish. But we take the medium to long-term view . ” Anyway, this is a good buying opportunity for me. “

Bitcoin was trading almost 2% higher on Friday.