Impact of Spot Bitcoin ETFs on the Market
Gabor Gurbacs, the director of digital assets strategy at Vaneck, has provided insights into the long-term effects of spot bitcoin exchange-traded funds (ETFs). As one of the asset management firms seeking to launch a spot bitcoin ETF with the U.S. Securities and Exchange Commission (SEC), Gurbacs believes that the initial impact of these ETFs will be relatively small, with only a few hundred million dollars in recycled funds. However, he argues that people underestimate the long-term significance of spot bitcoin ETFs, comparing their potential to gold’s growth trajectory in the early 2000s. Gurbacs predicts that bitcoin’s price could follow a similar path to gold’s, but at a much faster pace, upon the approval of a U.S. spot bitcoin ETF.
Bitcoin’s Potential Comparable to Gold
Gurbacs highlights the importance of studying the history of gold as a parallel for understanding the potential impact of spot bitcoin ETFs. He draws a comparison to the introduction of the SPDR Gold Shares ETF (GLD) in 2004, which resulted in gold’s market cap quadrupling from $400 to $1,800 and adding around $8 trillion in market value over eight years. Gurbacs emphasizes that bitcoin’s market cap is currently less than a third of what gold was in 2004, suggesting that the approval of a spot bitcoin ETF in the U.S. could lead to bitcoin following a similar growth trajectory.
Predicted Boost and Further Adoption
While Gurbacs acknowledges that only a few billion dollars will initially come from bitcoin exchange-traded product adoption, he emphasizes that the boost will still be significant due to the relatively low bitcoin float and systematic scarcity through halving schedules. In addition, he believes that the approval of a spot bitcoin ETF will legitimize and destigmatize bitcoin’s role in portfolios, leading to increased adoption outside of the ETF. Gurbacs predicts that nation states, sovereign wealth funds, and central banks will directly hold bitcoin and develop their own bitcoin-based capital markets, similar to the impact of gold ETFs on gold’s price increase.
Hot Take: The Potential of Spot Bitcoin ETFs
Looking ahead, the approval of a spot bitcoin ETF by the SEC could have a profound impact on bitcoin’s price and market cap. Gabor Gurbacs, Vaneck’s director of digital assets strategy, believes that a spot bitcoin ETF could propel bitcoin’s price trajectory to follow the growth of gold in the early 2000s, but at a much faster pace. By studying the introduction of gold ETFs and their subsequent impact on gold’s market value, Gurbacs suggests that the approval of a spot bitcoin ETF could lead to trillions of dollars in value for bitcoin. Furthermore, he predicts that the ETF will also contribute to further adoption and legitimization of bitcoin outside of the ETF, including by nation states and sovereign wealth funds.
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