VanEck’s Gurbacs: Whole Assets More Appealing to Investors than Bitcoin Fractions

VanEck's Asset Management Advisor, Gabor Gurbacs, believes that a Bitcoin ETF can solve the problem of unit bias among potential Bitcoin investors.

VanEck’s Gurbacs Complete assets more attractive to investors than Bitcoin fractions

Gabor Gurbacs, an adviser at asset manager VanEck, has shed light on an interesting psychological barrier that potential Bitcoin investors face – the desire to own complete units of the cryptocurrency. In a recent tweet, Gurbacs pointed out that the introduction of spot Bitcoin exchange-traded funds (ETFs), which are expected to go live soon, could potentially address this challenge.

It seems that many potential investors are still unaware that they have the option to own fractions of a Bitcoin. And even among those who are aware, there is a preference for owning whole assets rather than fractions. Gurbacs stated, “I was surprised that a good number of people didn’t know that one can own a fraction of a Bitcoin, and even more frequently, people didn’t want to own a fraction of a coin.”

The psychological satisfaction of owning a complete share outweighs the appeal of fractional ownership, according to Gurbacs. He believes that this bias towards whole assets plays a significant role in investor decision-making. “Owning a full share feels better than owning 0.001 Bitcoin. Seems like a small thing but it’s a big thing,” he added.

While this discussion is not new, Gurbacs emphasizes the importance of understanding unit bias psychology in shaping market behavior. He stresses that biases are essential for understanding market dynamics.

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Q&A: What Other Concerns Do Readers Have?

Q: Can I buy fractions of other cryptocurrencies as well, or is this limited to Bitcoin? A: Fractional ownership is not limited to Bitcoin; it applies to other cryptocurrencies as well. Investors can buy fractions of Ethereum, Litecoin, or any other cryptocurrency.

Q: Will the introduction of spot Bitcoin ETFs make it easier for investors to own whole assets? A: Yes, the introduction of spot Bitcoin ETFs will provide investors with an opportunity to own whole assets without having to deal with the complexities of buying and storing Bitcoin directly. ETFs make it easier for investors to gain exposure to Bitcoin.

Initial ETF Impact Overstated, VanEck’s Gurbacs Says

Earlier this month, Gurbacs made headlines when he stated that the initial impact of a spot Bitcoin ETF might be overstated. He believes that around $100 million should be expected to flow into ETFs, primarily from recycled funds, after the Securities and Exchange Commission (SEC) approves an ETF. However, he remains bullish about the long-term impact, stating that people tend to underestimate it.

To illustrate his point, Gurbacs shared a chart comparing the gold price before and after the introduction of the first spot gold ETF. He believes that studying the impact of gold ETFs can provide insights into the potential long-term impact of spot Bitcoin ETFs.

VanEck is one of several firms that have applied to list a spot Bitcoin ETF in the US. What sets VanEck apart from other ETF providers is its commitment to donating 5% of its BTC ETF profits to Bitcoin Core developers at the nonprofit organization Brink.

Future Outlook and Investment Recommendations

Based on the growing interest in spot Bitcoin ETFs and the preference for whole assets among investors, it is expected that the introduction of these ETFs will attract a significant amount of capital into the market. As more investors are able to own fractions of Bitcoin without the need for technical expertise, the barrier to entry will be lowered.

Investors who understand the dynamics of unit bias psychology can make informed decisions and take advantage of potential market trends. The long-term impact of spot Bitcoin ETFs should not be underestimated, and opportunities for profitable investments may arise.

It is important to diversify one’s portfolio and consider other investment options within the cryptocurrency space. Conducting thorough research, staying up-to-date with market developments, and consulting with financial advisors can help investors make sound investment decisions.

Reference List

1. Bitcoin (BTC) Price Pumps Towards $45,000 As Reporter Claims SEC to Approve Multiple BTC ETF Applications

2. Spot BTC ETF Could Reach $3 Billion in Initial Post-Launch Days of Trading, Broker Says

3. Investors Take Caution Amid Leverage Purge, Delayed Spot Bitcoin ETF Prospects – Expert

4. VanEck Commits Donating 5% of Its BTC ETF Profits to Bitcoin Developers

5. More news on VanEck

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