VanEck Adviser: Bitcoin ETF Impact Overestimated in Short-Term, but Potential for Long-Term Gains
Gabor Gurbacks, an adviser at VanEck, has stated that the hype surrounding a Bitcoin spot ETF may be overestimated in terms of immediate inflows. However, he believes that in the long run, the potential for significant gains is high. Gurbacks predicts that once the Securities and Exchange Commission (SEC) approves a Bitcoin ETF, around $100 million, mostly from institutional investors’ recycled funds, could enter the market.
“In my view, people tend to overestimate the initial impact of U.S. Bitcoin ETFs. I think maybe a few $100mm flows (mostly recycled) money.”
“Long term, people tend to underestimate the impact of spot Bitcoin ETFs. If history is any guide, gold is worth studying as a parallel.”
A Golden Case Study: Comparing Bitcoin to Gold
Gurbacks draws parallels between Bitcoin and gold by examining the introduction of the State Street ETF (GLD) for gold in November 2024. He notes that after the gold ETF was launched, its market capitalization surged from $2 trillion to $10 trillion, with the asset’s value quadrupling from $400 to $1,800. By using this case study, Gurbacks suggests that if estimates are accurate, Bitcoin could see trillions entering its market in the coming years.
“I also believe that only a few $10 Billion will come from Bitcoin ETP adoption and it won’t come all at once… but given 1) a relatively low Bitcoin float (strong hands/long-term holders) and 2) systematic scarcity via halving schedules that boost will be significant.”
Expanding Opportunities Beyond ETFs
Gurbacks emphasizes that the focus on ETFs has caused many to overlook the broader possibilities for Bitcoin’s growth. He believes that Bitcoin will create its capital market surge beyond ETFs, particularly through state sovereign funds and institutional funds. These entities have the potential to significantly impact the market, similar to what was observed with gold.
More Hype in the New Year
In the weeks leading up to the new year, the anticipation of a spot Bitcoin ETF approval led to increased inflows and boosted the overall market cap and assets under management (AUM) for cryptocurrencies, especially Bitcoin. Last year, Bitcoin investment products saw inflows of $1.6 billion, and AUM reached over $36 billion. Analysts have speculated that an ETF approval could bring trillions into the market and have a massive effect on Bitcoin’s price.
Hot Take: Potential for Long-Term Growth Despite Initial Impact
While the initial impact of a Bitcoin spot ETF may be overstated in terms of short-term inflows, there is still significant potential for long-term gains in the market. By examining historical trends in gold and drawing parallels between the two assets, analysts suggest that once a Bitcoin ETF is approved, trillions of dollars could enter the market. However, it is important not to overlook other avenues for growth beyond ETFs, such as state sovereign funds and institutional funds. As we enter a new year filled with hype surrounding cryptocurrencies, it remains to be seen how these factors will shape the future of Bitcoin.
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