VanEck Bitcoin ETF: Uptake could be between zero to a “few ten billion dollars” range

Gabor Gurbacs, the Director of Digital Asset Strategy for VanEck, spoke about why the SEC would approve the VanEck ETF, in an interview with CNBC Crypto Trader.

The Director was asked whether they speak to the SEC on a regular basis after submitting the proposal or whether they wait hoping for it to be approved. To this, Gurbacs remarked that VanEck has over sixty years of relationship with the regulators and that they do keep in touch which the SEC. He stated that it is a back-and-forth relationship when it comes to building the right market structure.

He went on to say:

“I do think that the SEC’s open to discussing improvements and proposals with market participants and again VanEck has a history of this, guessing the hard questions like what we’ve done with gold and international stocks and mutual funds and you know some harder to access countries like Russia Vietnam and so on so.”

Gurbacs further added that getting an approval is a long process and the regulators are open. The Director seemed optimistic about the SEC realizing that a Bitcoin ETF is their opportunity to regulate the space. He stated that the current exchanges are operating in a semi-gray area and that the regulators do not want to step in as it could hinder innovation. The Director said:

“So you know, right now, Coinbase and the larger exchanges of the world operate in this semi-gray area and the regulators don’t really do much about it because they don’t want to squash innovation but at the same time they want to make sure that the new capital markets stay intact.”

Gurbacs further added that the primary concern of the regulators was market manipulation, for which VanEck has built a pricing source which is hard to manipulate.

He continued to say:

“The SEC does not have direct jurisdiction to regulate the underlying spot markets, the CFTC does and the number of regulatory authorities do. So I actually do not understand the problem there […] what we tend to point out is that digital assets and Bitcoin is you know it’s not unique it doesn’t have more manipulation than others”

Bitcoin could be a nascent or early asset class, however, there are market standard tools that can be used by VanEck to avoid manipulation, he added.

Gurbacs further spoke about the institutional inflow which could occur, if the ETF were to be approved in March 2019. He said that in the current space there is about 90%-95% retail, who have invested in trading platforms, with not many security and safety measures. The Director went on to say that there could be a few billion dollar ETF if there would be an ETF in March. He said:

“There are gold ETFs and a few ten billion dollars range. I wouldn’t be surprised if a Bitcoin ETF would be in a few billion dollar range and, you know, the important part there is like if you have few billion dollars managed and a financial instrument, you have to make sure it’s not lost, its professionally managed or an exchange doesn’t run away with your money and all that.”

This is one of the reasons he believes that there would be demand for a Bitcoin ETF. Gurbacs further stated that in their internal projection, they forecasted that the uptake could be between zero to a “few ten billion dollars” range. This depends on the underlying market structure and the regulatory stance in the next few months to a year. He concluded:

“We are optimistic and I think if there if there will be a Bitcoin ETF and hopefully it will be our ETF then Bitcoin is here to stay for a century or more and it will be you know multi-billion dollar asset class on the ETF side”

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