According to VanEck advisor Gabor Gurbacs, the introduction of spot Bitcoin exchange-traded funds (ETFs) might someday generate trillions of dollars for the cryptocurrency industry but won’t likely have much of an impact on Bitcoin itself.Gurbacs stated that the “initial impact” of a Bitcoin ETF is being greatly overstated in a post on January 1 on X (previously Twitter). He projected that at launch, the fund may only experience net inflows of about $100 million from “mostly recycled” money from large institutional investors.
Gurbacs, however, was significantly more optimistic about the ETFs’ long-term effects on Bitcoin, citing the rise in gold prices that followed the introduction of gold ETFs.The first gold ETF was introduced by international investment advising firm State Street on November 18, 2004.According to Gurbacs, the price of gold more than doubled from $400 to $1,800 in the eight years after the introduction.The market capitalization of gold increased from $2 trillion to $10 trillion in the same period due to this disproportionate increase.With a current market valuation of $834 billion, bitcoin is worth around 41% of what gold was worth in 2004.
According to Gurbacs, Bitcoin’s price trend may resemble that of gold when a spot Bitcoin ETF is approved in the US, but it will probably happen “much faster” because of the cryptocurrency’s limited supply and events that make it more scarce, such as the halving.He went on to say that one of the most important advantages of a spot Bitcoin ETF is its capacity to normalize and decriminalize Bitcoin in the eyes of nation-states and institutional investors.Gurbacs was supported by analysts Eric Balchunas and James Seyffart of Bloomberg ETFs.
Though many people are fixated on the short-term metrics, such as the ETF’s first inflows, Seyffart concurred that people aren’t really understanding the product’s long-term worth.TradingView data shows that the price of bitcoin is currently $42,525, up 1.1% over the previous day.Others contend that the anticipated approval would be a “sell the news” event, with some arguing that it would cause a large and sustained price increase right after the decision.