VanEck’s Gabor Gurbacs: “America Wants a Bitcoin ETF”, Relates Gold Exchange-Traded Fund Approval Process


VanEck Could Be Our Best Hope For Seeing A Bitcoin ETF In The Near Future.

As we move into an era of digital finance, Gabor Gurbacs has made it abundantly clear that he is confident that a Bitcoin ETF will be coming to the market within the next couple of months. In this regard, he is highly optimistic that this offering will be brought to the global crypto investor community by VanEck, a New York based investment management firm.

Gurbacs is currently the Director of Digital Asset Strategy at VanEck/MVIS. However, he has become famous of-late because of his pro-bitcoin stance as well as for his affinity for blockchain technology. In addition to this, Gurbacs is also a regular feature on established media platforms such as Anthony Pompliano’s podcast as well as Ran Neu-Ner’s Crypto Trader show (that currently airs on CNBC Africa).

With that being said, even though Gurbacs is confident of a Bitcoin ETF offering coming to the market soon, many experts believe that the crypto maverick might be “a bit too overconfident” at the moment— especially since historical data does not seem to be on his side even in the slightest. To elaborate on this point further, we can see that up until this now, the US SEC has denied nearly all of the Bitcoin ETF proposals that have been submitted to it. Currently, the financial regulator has two more proposals to review, with one coming from VanEck while the other is from Bitwise (HOLD 10 Cryptocurrency Index Fund).

Despite these unfavorable odds, Gurbacs is calmly confident that VanEck has what it takes to ‘break the ongoing rejection trend’ and change the way in which major investors will view Bitcoin moving forward.

VanEck: A Brief History Of The Firm

In a recent interview given to Bitcoin Magazine, Gurbacs let it be known that VanEck has had an illustrious past when it comes to building international stock as well as investing in gold. For those not in the know how, VanEck was the first major financial player to introduce a gold equity mutual fund all the way back in 1968 — a time when the global gold market “accounted for a little over $200 million and the price of the yellow metal was fixed at $35 per ounce”.

Fast forward to around fifty years later and we now have gold trading at an impressive $1,200/ounce (with a $7.4 trillion market cap). Not only that, the precious metal is also widely considered to be a “a global safe haven asset,” since it is still viewed by many people as being an amazing ‘store-of-value’.

At this point in the article, it is also worth mentioning that John van Eck, the company’s principal founder, was a direct student of Austrian-American economist Ludwig von Mises— who is also referred to as “one of the earliest gold bugs in the U.S.” Similarly, VanEck’s heir and the company’s current CEO, Jan, is also a pioneer of sorts since he is now primed to be the person who will introduce “some of the first non-traditional ETFs” to the U.S. market.

Following in his father's footsteps, Jan F. van Eck is now looking to do with bitcoin what his dad did with gold just a few decades earlier.

Gurbacs: “Bitcoin Needs To Be Made More Appealing For The Masses”

As mentioned earlier, the Bitcoin community at large seems to be awaiting the release of a BTC ETF, but so far, the SEC has pretty much either held off its decision on the matter or has outright rejected the proposals based on the notion that these offering could majorly destabilize the US economic sector.

In this regard, Gurbacs made it clear that the agency’s rejections stem from the same set of problems that most of the applicants have failed to adequately cover. These areas include:

  • Pricing
  • Custody
  • Liquidity
  • Manipulation of the underlying asset

He also went on to add that:

“Regulators were very keen on the fact that spot platforms like Coinbase, Gemini and the like are technically regulated entities but not really meant to be brokers for commodities. In some regulators’ eyes, these entities aren’t regulated. In the US, market data is accessible to regulators should they subpoena or flag any suspicious activity.”

Also, in regards to ETFs, Gurbacs stated that these offerings come with pricing sources that “lack a regulated market structure” as well as the fact that their transaction volume is too slim to guard against manipulation.

“I don’t expect the SEC to walk back on its decision over those 9 ETFs because none of the providers solved any problems related to market structure issues that the SEC clearly outlined. I’m glad they’re reviewing and doing their jobs, but I don’t see any change.”

Looking Ahead

As mentioned earlier, the US SEC has already dismissed 9 ETF applications over the past few months. Thus, in order to avoid the same mistakes that have been already been made by its competitors, VanEck’s executive brass has taken extra care so as to follow all of the guidelines put forth by the SEC.

“We’ve met with regulators a few times and made sure we understand their questions, spending years — literally years — to answer those questions and build the proper market structure: what’s the right pricing, should surveillance be in place, how do you trade institutionally, how do hedge against market manipulation”

Lastly, to prove its mettle, VanEck has also devised its very own pricing source from scratch (which has been built using feedback from the SEC). As per Gurbacs, the aforementioned source draws data primarily from three established over-the-counter (OTC) pricing feeds. However, beyond that, Gurbacs did not reveal much more.

ETFs Will Help Legitimize Bitcoin Globally

Given VanEck’s long standing history of dealing with the US SEC, Gurbacs seems to be hopeful in regards to his firm winning over the regulatory agency’s approval for their latest crypto-based financial offering.

However, unlike Gold whose value shot up when VanEck released the world's first gold equity fund, Gurbacs believes that a Bitcoin ETF has little to do with the price of the offering but more to do with the “long-term legitimization of bitcoin”.

“That’s tough for me. I’ll be up front: I do not like price prediction. I don’t think that’s the important part. Providing access to the assets in a regulated and globally accepted way is the important aspect of our efforts. I’m hoping that the impact is that people who previously couldn’t get involved with buying bitcoin will also get into the market; it’ll also help adoption.”

He then went on to state that:

“Bitcoin does not need an ETF, but it would benefit from having an ETF. An ETF would help bitcoin survive for at least 100 years. And I’m not kidding with this. There was gold trading before a gold fund or a gold ETF, but when the first product came out, the gold market grew tremendously, practically from $200 million to $7.4 trillion, and toward the end of the spectrum (5-10 years), volatility dampened and gold established itself as a global store of value — a government hedge, a hedge against global markets.”

Final Take

While it still remains to be seen what the future has in store for VanEck, Gurbacs did make some valid points while comparing Bitcoin with Gold.

“Bitcoin is just like gold. It needs financialization in order to get more liquidity and achieve the status of a true store of value. Financialization is good for bitcoin. It helps liquidity, it helps adoption, it helps with scaling. The biggest underappreciated scaling platform for Bitcoin is the financial system.”

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