A VanEck adviser says that Bitcoin ETFs will get rid of unit bias.
Gabor Gurbacs, an adviser at VanEck, talks about how buyers feel better when they own the whole product instead of just a part of it. This is especially true for Bitcoin.
Gabor Gurbacs, an adviser at VanEck, says that the price of a whole Bitcoin (BTC) can turn off potential buyers who don’t want to buy a small amount of the cryptocurrency because of unit bias psychology, which says that having whole units is more appealing. He says that Bitcoin exchange-traded funds (ETFs) could help with this problem.
In a series of posts on X (formerly Twitter), Gurbacs said that a lot of people still don’t know they can own a piece of bitcoin and that even more people would rather only own whole assets:
It shocked me that many people didn’t know they could own a small part of a bitcoin, and even more often, they didn’t want to own a small part of a coin.
Bitcoin is trading at ~$44,000 today.
ETFs usually launch with a double-digit NAV, often $25. So, say hypothetically that Bitcoin ETFs would launch at $44 per share, removing 3 zeros.
That removes a lot of unit bias. Suddenly Bitcoin exposure looks more affordable.
Simplistic…
— Gabor Gurbacs (@gaborgurbacs) January 6, 2024He also says again that buyers seem to want to own the whole product rather than just a part of it.
“It feels better to own a full share than 0.001 Bitcoin.” “It seems like a small thing, but it’s a big deal,” he said.
Gurbacs agrees that this argument is not new, but he still believes that biases are one of the best ways to understand markets.
Unit bias in psychology is important, but it’s not very complicated. “This is something I think about a lot,” he said.
In the meantime, everyone in the cryptocurrency world is very hopeful that the US Securities and Exchange Commission (SEC) will approve a spot Bitcoin ETF this coming week.
But people in the financial services business as a whole are less sure that it will happen.
A recent poll by Bitwise of 437 financial advisers found that only 39% of U.S. financial advisers think that a Bitcoin ETF will be approved in 2024.
Cointelegraph recently said that the last few steps are being taken to make a spot for the Bitcoin ETF launch on Wall Street. Asset managers should make their final changes by the morning of January 8th.
Before the business day starts, the changes must be sent in as S-1 files, and applications are expected to show what fees and tickers are still due.