Key Points
- Bitcoin ETFs have seen significant capital inflow in 2024, mostly from the retail sector.
- Traditional banks and institutional investors have yet to make significant investments in Bitcoin ETFs.
Bitcoin Exchange-Traded Funds (ETFs) have seen a surge in capital inflow in 2024, with the retail sector being the main contributor.
Jan van Eck, CEO of VanEck, shared these insights during Paris Blockchain Week. He noted that the success of ETFs, which have seen billions of dollars in inflows on certain days, exceeded his expectations.
Institutional Involvement in Bitcoin ETFs
However, van Eck believes these inflows have not been significantly influenced by traditional finance players.
He stated that while some Bitcoin whales and other institutions have moved assets into Bitcoin ETFs, these entities were already exposed to Bitcoin.
Van Eck also revealed that no U.S. banks have officially approved or allowed their financial advisers to recommend Bitcoin. He suggested that the next month could see some major institutional investments from banks and traditional firms, but clarified that the Bitcoin ETF landscape is still in its early stages.
Investing in Bitcoin ETFs vs Buying Bitcoin Directly
When asked why investors would prefer to invest in a Bitcoin ETF over directly buying and managing BTC themselves, van Eck cited convenience. He explained that investors prefer fund managers to handle their entire portfolios. He also pointed out the affordability of ETFs, citing single-digit spreads and low or no fees compared to the 2% spreads on many centralized exchange platforms like Coinbase.
VanEck was founded in 1955 by John van Eck, who launched the first gold fund in the U.S. in 1968. Jan van Eck said his father’s fund thrived as inflation increased in the 1970s.
He stated that his focus on emerging assets that could rival gold has kept him vigilant. He acknowledged that while Bitcoin will not replace gold, it will significantly complement it in people’s portfolios.
Van Eck added that there’s an argument for Bitcoin being a better store of value than gold in modern times. He also alluded to the U.S.’s “big budget deficit problems” that need to be addressed in the upcoming year.
While the impact of Bitcoin ETFs and the appreciation of Bitcoin in 2024 has been significant, van Eck said their influence might be overstated. He pointed to a sharp rise in Bitcoin’s price in early April that did not occur during U.S. trading hours, suggesting the influence of Asian markets.
