A Bitcoin ETF may have a ‘downside’ launch, but it could attract trillions over time.
The launch of spot bitcoin (BTC) exchange-traded funds (ETFs) will have little impact on Bitcoin, but could eventually bring trillions of dollars into the cryptocurrency sector, VanEick consultant Gabor Gurbax said.
In a Jan. 1 post for X (formerly Twitter), Gurbax said the Bitcoin ETF's “initial impact” is highly anticipated — estimating it could see nearly $100 million in net inflows from “mostly recycled” money from large institutional investors. When it starts.
In my view, people tend to overestimate the initial impact of the US Bitcoin ETF. I think maybe a few $100mm flows (mostly recycled) money.
Long-termers tend to underestimate the impact of spot bitcoin ETFs. If history is a guide, gold is worth studying as a parallel. https://t.co/6vvkA9aC09
— Gabor Gurbacs (@gaborgurbacs) December 31, 2023
However, Gurbacs was extremely bullish about the long-term impact of ETFs on Bitcoin, citing the appreciation in gold prices that came after the launch of gold ETFs.
In the year On November 18, 2004, global investment advisory firm State Street launched its first gold ETF. Gurbaks explained that in the eight years since his inauguration, the price of gold has more than quadrupled from $400 to $1,800. This overvaluation has caused the total market value to grow from $2 trillion to $10 trillion in one period.
Bitcoin commands a market value of $834 billion today, 41% of gold's 2004 capitalization.
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Gurbacs believes that following the widely anticipated adoption of a Bitcoin ETF in the United States, Bitcoin's price trajectory may very well follow in the footsteps of gold, but with capped supply and increasing scarcity, such as a halving.
He added that one of the most important advantages of a Bitcoin ETF comes from the ability to legitimize and isolate Bitcoin in the eyes of institutional investors and nation-states.
Bloomberg EFF analysts Eric Balchunas and James Seifert agreed with Gurbach.
Mostly agreeing with Gabor on this. The consensus (in the short term) seems to be that people focus on huge short-term impacts, which I think can be a bit understated and at the same time not fully appreciating the long-term impacts. https://t.co/z69Wbffcu9
— James Seyff (@JSeyff) December 31, 2023
Seifert agrees that while many are laser-focused on short-term data points like a day's entry into an ETF, they're not fully appreciating the long-term impact of this type of product.
Bitcoin is currently changing hands at $42,525, up 1.1% over the past 24 hours, according to TradingView data. Many market commentators
Some say the expected approval will cause significant and long-lasting volatility in prices after approval, while others argue that the approval is “selling the news.”
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