Bitcoin ETFs Hold Long-term Potential Over Immediate Impact: VanEck Adviser
Summary:
Despite initial expectations, the introduction of Bitcoin spot exchange-traded funds (ETFs) may not have an immediate significant impact on the cryptocurrency's value, according to VanEck adviser Gabor Gurbacs. However, he predicts a potential influx of trillions of dollars to the cryptocurrency in the long run. Drawing comparisons with the price growth seen in gold after the introduction of gold ETFs, Gurbacs maintains that Bitcoin's price trajectory post spot ETFS could mirror this "much faster". His views were backed by Bloomberg ETF analysts Eric Balchunas and James Seyffart. As of now, Bitcoin trades at $42,525.
Despite widespread speculation, the introduction of Bitcoin (BTC) spot exchange-traded funds (ETFs) may not have an immediate significant effect on Bitcoin's value, yet they hold the potential to eventually channel trillions of dollars into the cryptocurrency, says Gabor Gurbacs, an adviser at VanEck. In a statement issued on X (previously known as Twitter) on the first day of the new year, Gurbacs contested the widely held notion of immediate significant gains from a Bitcoin ETF. He suggested that the launch might only generate an inflow of roughly $100 million, primarily from the re-allocation of funds by large investors.
Gurbacs is considerably more optimistic about the longer-term impact of the ETFs on Bitcoin, drawing a comparison with the rise in gold prices following the emergence of gold ETFs. State Street, a global investment advisory firm, introduced the first gold ETF on November 18, 2004. The eight years succeeding the launch witnessed a substantial growth in the price of gold, with its value jumping from $400 to $1,800. This appreciation resulted in the total market value of gold rising from $2 trillion to $10 trillion within this period. Today, Bitcoin's market value stands at $834 billion, only 41% of gold's market capitalization in 2004.
Post the anticipated approval of a spot Bitcoin ETF in the United States, Gurbacs anticipates Bitcoin's price could mirror the growth trajectory of gold, yet expects this to happen "much faster" as dictated by Bitcoin's limited supply and scarcity-enhancing episodes like the halving. Additionally, this kind of ETF would play a key role in legitimising and reducing the stigma around Bitcoin among institutional investors and nation-states. Bloomberg ETF analysts Eric Balchunas and James Seyffart aligned with Gurbacs' viewpoints.
Seyffart echoed Gurbacs' sentiment, emphasising that while many remain engrossed with short-term indicators such as initial inflows into the ETF, the profound potential for long-term transformation seems overlooked. As of current, Bitcoin trades at $42,525, reflecting a 1.1% increment over the past 24 hours, as per the TradingView data. Some argue that the approval could bring about a significant, enduring spike in prices immediately following the go-ahead, while others contend that the nod could result in a 'sell the news' type of situation.
Published At
1/1/2024 6:05:56 AM
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