Spot Bitcoin ETF Launch Anticipated to be a ‘Letdown,’ Yet Holds Trillion-Dollar Attraction Over Time, Advises VanEck

• The expected approval of a Bitcoin spot ETF will be a letdown for the crypto sector, a VanEck executive says, noting that it will initially attract just a few hundred million dollars.
• However, he believes the ETFs will make Bitcoin a mainstream asset and legitimize it for institutional investors long-term, projecting a journey similar to gold since the first ETF in 2004.

The Bitcoin spot ETF applications are edging closer to the landmark date in about a week’s time when the SEC will reveal whether they have been approved or denied. Many believe this will be the tipping point that sparks a parabolic price surge for the top crypto. However, according to one VanEck executive, the approval will be a letdown to those expecting big price moves but will be transformational in the long run.

The SEC is expected to rule on the applications from January 10, with VanEck among the big Wall Street players waiting with bated breath. Other applicants include Fidelity and BlackRock, with Grayscale being the largest native crypto company to have filed an application.

But while many expect BTC to kickstart a bullish cycle upon the ETF approval, VanEck advisor Gabor Gurbacs says it will most likely be a disappointment.

“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,” tweeted Gabor, who is also an advisor at Tether, the issuer of the largest stablecoin in the market, the $92 billion USDT.

However, according to him, the market is underestimating the impact that the ETFs can have in the long run. Gabor drew parallels between Bitcoin and gold, noting that he expects the ETF to transform the top crypto similarly to what it did for the precious metal.

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. https://t.co/6vvkA9aC09

— Gabor Gurbacs (@gaborgurbacs) December 31, 2023

Spot ETF to Transform Bitcoin: VanEck Exec Says

Gabor added that most investors get too excited about current events and forget to consider how they play out long-term. For him, BlackRock issuing a BTC spot ETF shouldn’t be the focus. Rather, the conversation should centre around what native crypto companies can use products like the ETF to become the next trillion-dollar investment vehicles.

He stated:

People tend to hype the current thing but remain myopic about the big picture. Bitcoin is forcing its own capital markets systems and products well beyond the ETF and that’s not priced in. The question is not what BlackRock adopts, but what Bitcoin company is the next BlackRock.

The investment titan cited gold as the perfect example of how transformational an ETF can be to an asset. The first gold spot ETF was issued in 2004 in the US, a year after it launched in Australia. State Street launched SPDR Gold Shares in November 2004, and within three trading days, it surpassed a billion dollars.

Eight years later, the price of gold had shot up from $400 to $1800, with the asset’s market cap shooting from $2 trillion to $10 trillion.

Gabor stated:

Bitcoin’s market cap is $750 Billion today, less than 1/3rd of what gold was in 2004. In my view, upon the approval of a U.S. spot Bitcoin ETF, Bitcoin’s price trajectory could follow gold’s blueprint from 2004 and the years after, just much faster.