90% of Bitcoin ETF inflows are still retail — VanEck CEO

In the year 2024, Bitcoin (BTC) ETFs have seen a large inflow of investments. However, major banks and institutions have yet to jump on board.

At Paris Blockchain Week, VanEck CEO Jan van Eck had an exclusive conversation with CryptoMoon. He shared that it’s mostly the retail market driving investments into US Bitcoin Spot ETFs.

Van Eck expressed surprise over the strong start of ETFs, with massive investment pouring in on certain days following their debut. Yet, he maintains that this surge in funds is not primarily driven by Traditional Finance (TradFi) institutions.

Van Eck expressed surprise but maintained that most investments in Bitcoin are still from individual retail investors rather than traditional institutional investors. A few large Bitcoin investors and some institutions have made moves, but they had previously invested in Bitcoin.

To put it simply, the head of the investment company noted that neither American bank nor have they given authorization for their financial consultants to suggest investing in Bitcoin yet.

Van Eck expressed that the upcoming month might bring significant investments from banks and established companies into Bitcoin. However, he noted that the Bitcoin ETF market was still in its early stages.

“There’s a lot of maturation to happen. A lot of technology will be developed on-chain, so there’s a long way to go.”

CryptoMoon questioned the rationale behind choosing to invest in a Bitcoin ETF rather than purchasing and managing Bitcoin personally. Van Eck explained that convenience played a significant role, as many investors opt for professionals to manage their entire investment portfolios.

“Van Eck expressed that with us, you get the benefits of convenience, safety, and affordability. On decentralized platforms like Coinbase, you used to have spreads of 2%. Now, through our ETFs, you’ll find spreads in the single digits, with no fees or minimal costs. It’s simpler than ever – just place a buy order.”

Following in his father’s footsteps

VanEck was established in 1955 by John van Eck, who gained recognition by launching the first gold investment fund in the US in 1968 when gold was linked to the dollar’s value. During the 1970s, when inflation surged, John’s fund prospered under his son Jan van Eck’s management.

Van Eck explained that his cautious business mindset, which some might label as paranoia, has helped him stay attuned to potential new investments that could challenge gold’s dominance.

“In 2017, we said Bitcoin will not replace gold, but it will significantly complement it in people’s portfolios.”

Van Eck expressed that his investment strategy, which encompasses a broad perspective, is influenced by the recognition that political, economic, and technological developments shape financial markets. Prior to the 2010s, no significant new asset class had emerged, but Bitcoin gained popularity and prominence during that period.

Van Eck shared his perspective on exploring Bitcoin: “I’ve begun considering Bitcoin. It’s not that I’m deeply infatuated with it, but I believe there are moments when having a value asset in your investment portfolio is essential. That’s my focus.”

The CEO made the point that Bitcoin could be a more effective store of value than gold during the present day. Additionally, he mentioned that the United States faces significant budget deficits which need to be addressed in the near future. This issue is causing market fluctuations as investors prepare for the expected solutions.

Although Bitcoin ETFs received significant attention and contributed to Bitcoin’s price increase in 2024, according to Van Eck, their influence may have been exaggerated.

“What I’d like to point out is that it’s not the most earth-shattering thing. The Bitcoin market is more global and much deeper than just being influenced by the ETFs.”

In early April, there was a noticeable increase in price that didn’t align with U.S. market hours, suggesting Asian markets had an impact on this price trend according to Van Eck.

2024-04-11 11:43

Following in his father’s footsteps

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