VanEck advisor Gabor Gurbacks has emphasized that the excitement surrounding a Bitcoin (BTC) spot ETF might be overestimated in terms of immediate influx but could lead to substantial gains over the long term as the opportunity expands.
In a January 1st post on X (formerly Twitter), Gurbacks suggested that the impact of a spot BTC ETF has been exaggerated in recent months, projecting limited initial inflows followed by a subsequent surge.
He proposed that, initially, only $100 million, mostly derived from recycled funds from institutional investors, might enter the market once the Securities and Exchange Commission (SEC) approves the ETF.
Nonetheless, Gurbacks anticipates a substantial increase in market inflows over the long run, driven by institutional investors. Analysts draw parallels with past gold statistics as a benchmark to predict the market’s trajectory.
A golden case study
Based on the well-established gold analysis, the bullish sentiment in the sector appears justified, given the anticipation of trillions in value, even though the precious metal already held a higher market capitalization before the introduction of the SDPR (State Street) ETF (GLD) in November 18, 2024.
Following the rollout of the gold ETF, the asset’s trajectory skyrocketed from $400 to $1,800, leading to a remarkable surge in market capitalization from $2 trillion to $10 trillion—a quadrupling effect.
Comparatively, Bitcoin currently occupies a prominent position with a market value hovering around $750 billion. Although lagging behind gold’s standing at the time, if estimates prove accurate, the forthcoming years could witness the cryptocurrency market reaching trillions. Gabor Gurbacks suggests that this ascent might occur at a faster pace than experienced by gold.
“I am of the opinion that the influx from Bitcoin ETP adoption will likely amount to just a few $10 billion and will not happen all at once. However, considering two key factors: 1) the relatively low Bitcoin float, indicating a prevalence of strong hands and long-term holders, and 2) systematic scarcity driven by halving schedules, the impact is expected to be substantial.”
Gabor Gurbacks highlighted that many industry participants have overly emphasized the expected growth, potentially overlooking broader possibilities. Beyond ETFs, Bitcoin is anticipated to catalyze its own capital market surge in the upcoming months. A significant argument revolves around the enhanced credibility an ETF would lend to the asset, particularly among institutional investors.
Gurbacks envisions additional opportunities emerging from state sovereign funds and institutional funds, exerting a direct influence on the market, akin to the trends observed in the gold sector.
More hype into the new year
In the weeks preceding the new year, cryptocurrencies, especially Bitcoin, experienced significant inflows, leading to a boost in the overall market capitalization and assets under management (AUM), driven by the anticipation of a potential approval for a spot Bitcoin ETF.
The prevailing narrative, which dominated the crypto landscape for the majority of the year, propelled the market to new highs not witnessed in months. Wealth funds and various investors increased their exposure to Bitcoin, shaping the crypto narrative.
In the previous year, Bitcoin investment products attracted inflows totaling $1.6 billion, contributing to a surge in AUM to over $36 billion. Numerous analysts foresaw that an ETF approval could potentially usher in trillions of dollars into the market, significantly impacting the price of the asset.
