As the bitcoin hype continues to gather momentum, ETF Trends sat down with Gabor Gurbacs, Director of Digital Asset Strategy at VanEck (pictured above), to discuss bitcoin’s growth potential.
Gurbacs has extensive digital asset trading and market structure experience and he is well known in the digital asset community.
Prior to joining VanEck, Gurbacs was a George Soros Scholar, Edgar Bronfman fellow, serial entrepreneur, and holder of several new economy finance research positions at the Massachusetts Institute of Technology (MIT), Harvard, and Williams College. Gurbacs earned a BA from Williams College, triple majoring in Mathematics, German and Sociology.
What is Bitcoin’s growth potential?
If you view bitcoin as “digital gold” then there is tremendous growth potential. Gold’s market capitalization is about $8 Trillion, bitcoin is approaching $200 billion. In other words, if purely compared to gold’s total value, bitcoin might have as much as 40X more growth potential. If you compare bitcoin to M1, that is the total quantity of currency in circulation, bitcoin’s M1 is larger than the M1 of Mexico, Venezuela and Denmark. I’d be surprised if bitcoin would fully assume gold’s safe-haven role, but bitcoin could get to $1 trillion dollar market cap—compared to the $8 trillion market cap for gold—which is still up 4 to 5 times from here.
Does VanEck plan to use ETFs on the new crypto indices?
VanEck’s MVIS launched 12 single digital asset indices and 4 multi-asset indices. The new indices are robust, transparent and investable benchmarks that can be used for active and passive portfolio strategies, futures contracts, derivatives and other investment instruments. My personal favorite multi-asset index is the DA10 which offers exposure to the largest and most liquid 10 digital assets. The DA10 contains Bitcoin, Ether, Ripple, Bitcoin Cash, Litecoin, IOTA, and Dash to name a few. It’s great that for the first time investors can monitor the top digital assets via rules-based, transparent and independent indices from a major global index provider. MVIS and CryptoCompare did a phenomenal job. (Learn more here: https://www.mvis-indices.com/indices/digital-assets/mvis-cryptocompare-digital-assets-10).
Do futures contract announcements help the VanEck Bitcoin ETF?
Recently announced Bitcoin futures contracts significantly increase the chance of a futures-based bitcoin ETF approval. The logical step once the bitcoin futures market exist is to revisit the VanEck Bitcoin Strategy ETF. We are actively working with regulators and market participants to drive a greater understanding of digital assets as digital asset are here to stay and show signs of developing into a distinct asset class. VanEck is the 8th largest U.S. ETF provider and it was first to file for a derivatives based bitcoin ETF. VanEck is known to provide access to hard to access markets and opportunities for institutional and retail investors.
For more information on the cryptocurrency market, visit our Bitcoin category.