A Bitcoin ETF could attract billions in new investments, says Gabor Gurbacs, director of Digital Assets Strategy at VanEck.
In an interview with CNBC, he noted a VanEck product would serve as a safeguard for investors. “What sets our ETF apart is that it’s a physical bitcoin ETF. So, it stays true to the bitcoin you own in underlying,” he explained, as noted by CCN. “It’s fully insured so if there is any theft, hacks or losses; then the insurance covers it.
“While one cannot rule out manipulation in the underlying spot market, we believe that, due to the diversified ownership and volume of trading, the market does not have major, structural vulnerabilities. Therefore, the Commission’s increased enforcement and regulatory actions can reduce the number of bad actors in a basically sound market”
Five Key Reasons a Bitcoin ETF is Inevitable
According to recent reports, VanEck SolidX group has spoken to the US SEC, highlighting five reasons for approval. For one, “There now exists a substantial regulated derivatives market for Bitcoin.” Two, “Worries concerning price manipulation have eased, consistent with approval of prior commodity-based ETPs.”
Three, “CBOE’s rules are created to surveil for potential manipulation of Trust shares.”
Four, Authorities are regulating relevant markets. “These include CBOE, bitcoin futures, OTC desks.” And five, this “Encourages investor protection.”
According to VanEck, “Investors are left facing absolute counterparty risk and such risks are often unacceptable to many investors. An ETF provides a straightforward solution for investors seeking price exposure without facing counterparty risk, as the ETF would be cleared through DTCC. Furthermore, in creations and redemptions, the Trust always requires APs and trading counterparties to settle their leg of the trade before the trust will do so.”
VanEck Director Market Prediction
Gurbacs also notes a Bitcoin ETF could perform like a traditional gold ETF. As noted by CCN, “Institutional investors, who do not want to take risks by investing in bitcoin via less secure and safe spot markets, could find ETFs as a go-to option. As a result, the very first day of a BTC ETF could attract as much as $1 billion in investments.”
“Our gold ETFs are already in a few billion dollars range,” Gurbacs added. “There are gold ETFs in $10 billion range as well. I wouldn’t be surprised if a bitcoin ETF gets in a few billion dollars range.”
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