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    VanEck: Long-Term Gains of Bitcoin ETF Outshine Overestimated Spot Impact

    Gabor Gurbacks, an adviser at VanEck, emphasized that the market’s excitement surrounding a Bitcoin (BTC) spot ETF may be exaggerated in terms of immediate cash influx. However, he believes that as time progresses, there is potential for substantial profits to be made.

    Gurbacks took to X (previously known as Twitter) on January 1st to share his perspective, challenging exaggerated notions about the significance of a potential BTC ETF. According to him, initial inflows might be modest before experiencing a sudden surge in the future.

    His claims suggest that, once the Securities and Exchange Commission (SEC) grants its approval for an ETF, a mere $100 million, primarily derived from recycled capital from institutional investors, could enter the market.

    On the contrary, over time, extensive investments from institutional investors are expected to flood the market, while analysts rely on gold’s historical data as a reference point for forecasting its trajectory.

    A Golden Case Study

    Based on expert opinions in gold analysis, it is reasonable to have a positive outlook in the industry as it is projected to generate trillions in revenue, even though the precious metal had already achieved a significant market capitalisation before the introduction of the SDPR (State Street) ETF (GLD) on November 18, 2024.

    The introduction of the gold ETF caused a remarkable surge in the asset’s value, skyrocketing from $400 to $1,800. This surge was accompanied by a significant growth in market capitalization, increasing by an astounding $8 trillion, propelling it from $2 trillion to an impressive $10 trillion.

    In a parallel manner, Bitcoin currently reigns supreme in the market at approximately $750 billion. Nonetheless, if estimates prove accurate, the future holds the potential for trillions in the market, surpassing the value of gold. According to Gurback, this forthcoming rise could happen at a swifter pace.

    Many experts have pointed out that the industry players tend to exaggerate the expected growth while disregarding the broader potential. In the upcoming months, Bitcoin’s surge in the capital market is predicted to surpass the impact of ETFs. This is due to the significant emphasis placed on the credibility an ETF would provide to institutional investors about certain assets.

    Gurbacks foresee abundant prospects within state sovereign funds and institutional funds, exerting direct influence on the market, as evidenced by the historical impact observed on the price of gold.

    More hype into the new year

    The approach to the approaching new year increased inflows for cryptocurrencies, with Bitcoin taking the lead. This surge in interest has led to a substantial rise in the overall market cap and assets under management (AUM). The main driving force behind this growth is the potential approval of a BTC ETF, which has attracted considerable attention.

    Bitcoin experienced a surge in market value, unseen for months, as wealth funds and various investors embraced the crypto narrative that had dominated the year’s events. This narrative played a significant role in driving the market to new heights and attracting increased interest in Bitcoin.

    In the previous year, the influx of funds into Bitcoin investment products reached a substantial $1.6 billion, leading to a remarkable increase in Assets Under Management (AUM) which surged beyond $36 billion. Numerous experts have foreseen the potential approval of an Exchange-Traded Fund (ETF) as a catalyst that could invite trillions of dollars into the market, ultimately causing a profound impact on the price of this valuable asset.

    Frequently asked questions:

    What does Gabor Gurbacks, an adviser from VanEck, state as the primary emphasis concerning the consequences that a Bitcoin spot ETF could have?

    Gabor Gurbacks, an advisor at VanEck, believes that the anticipation of a Bitcoin spot ETF may not bring immediate investment surges, but highlights the possibility of substantial profits in the long run due to increasing institutional interest.

    How does Gurbacks anticipate the immediate influx and enduring profitability of a spot Bitcoin ETF?

    Gurbacks expects an initial influx of roughly $100 million, originating mainly from institutional investors’ recycled funds after the SEC gives the green light to a Bitcoin ETF. Nevertheless, he highlights the prospect of significant future profits as institutional investors progressively engage in the market.

    How does Gurbacks use a comparison to justify his optimistic view on the long-term potential of Bitcoin ETFs?

    In gold trading, Gurbacks brings attention to a significant event that occurred on November 18, 2024. A new player emerged in the market known as the SDPR (State Street) ETF (GLD), which drew comparisons to the gold market. Notably, Gurbacks highlights the remarkable transformation experienced by gold during this period. Its value quadrupled, skyrocketing from $400 to an impressive $1,800. Moreover, the total market capitalization of gold saw an incredible surge, climbing from $2 trillion to an astounding $10 trillion.

    What does the introduction of gold’s ETF imply for Bitcoin’s potential market growth?

    Similar to the advent of gold’s ETF, the inclusion of Bitcoin in this case study implies that there is a likelihood of substantial market expansion and astronomical valuation in the upcoming years. Furthermore, there exists a possibility for accelerated progress in comparison to gold.

    What wider prospects does Gurbacks emphasise apart from the influence of ETFs on the Bitcoin market?

    Gurbacks highlights the importance of not fixating solely on ETFs within the industry. According to him, Bitcoin is on the brink of propelling its capital market growth even further than ETFs in the upcoming months. He believes that state sovereign funds and institutional funds hold promise, drawing a parallel to the significant influence observed in the gold market.

    In the weeks preceding the new year, what is Gurbacks’ perspective on the prevailing storyline regarding Bitcoin?

    According to Gurbacks, the crypto market experienced substantial effects due to the narrative surrounding the possible approval of a spot Bitcoin ETF. This narrative resulted in a surge of inflows, ultimately bolstering the overall market capitalization and assets under management (AUM).

    In the past year, what were the significant figures for Bitcoin investment products, and what are analysts’ predictions for the market’s response to the approval of ETFs?

    Bitcoin investment products experienced a staggering influx of $1.6 billion in the preceding year, leading to a remarkable surge in Assets Under Management (AUM) to surpass $36 billion. Anticipating a monumental turn of events, experts project that the green light on a Bitcoin exchange-traded fund (ETF) can invite trillions of dollars into the market, potentially causing an enormous upheaval in the asset’s valuation.

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    See also: BitMEX Co-founder Swaps Solana for Ethereum, Foresees $5,000 ETH Surge

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