May 23, 2024
Bitcoin ETFs Attract Strong Retail Inflows in 2024, Says VanEck CEO
Bitcoin ETF

Bitcoin ETFs Attract Strong Retail Inflows in 2024, Says VanEck CEO

Bitcoin ETFs have seen significant capital inflows in 2024, but traditional banks and institutional investors have yet to make substantial investments in the space.

VanEck CEO Jan van Eck provided insights into the market dynamics during Paris Blockchain Week.

Retail Sector Dominates Inflows

Van Eck highlighted that the retail sector has been the primary driver of inflows into spot Bitcoin ETFs in the United States.

The success of the ETFs has exceeded expectations, with billions of dollars in inflows on some days since their launch.

Despite this success, he noted that traditional finance (TradFi) players have not driven the inflows. “I was surprised, but I don’t think it’s traditional investors yet. I still think 90% of the flows are retail,” said vanEck.

Jan van Eck on stage at Paris Blockchain Week. Source: Gareth Jenkinson

Limited Involvement from Traditional Finance

The CEO of VanEck emphasized that no U.S. banks have officially approved or allowed their financial advisers to recommend Bitcoin to date.

He expects that some major institutional investments from banks and traditional firms may emerge in the coming months, but he also acknowledged that the Bitcoin ETF landscape is still in its infancy.

When asked about the preference for investing in a Bitcoin ETF over directly managing Bitcoin holdings, van Eck cited convenience, safety, and affordability as the primary reasons.

“You had 2% spreads on many centralized exchange platforms like Coinbase. We have single-digit spreads for the ETFs and no fees or low fees. It’s easier just to do a buy ticket than anything else,” he explained.

VanEck’s Approach to Investing

Founded in 1955 by John van Eck, the investment management firm established the first gold fund in the United States in 1968. Van Eck’s father saw the fund boom during the inflation of the 1970s.

Van Eck noted his tendency to be a “paranoid business person” and his focus on emerging assets that could challenge gold.

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

His approach to investing takes into account political, economic, and technological trends that influence financial markets.

The Global Impact of Bitcoin ETFs

While the impact of Bitcoin ETFs and the price appreciation of Bitcoin in 2024 have been significant, van Eck believes that their influence might be overstated.

“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,” he commented.

Van Eck pointed to a sharp rise in Bitcoin’s price in early April that did not occur during U.S. trading hours, highlighting the influence of Asian markets on the global Bitcoin market.

Image by Mateusz Kara on Flickr

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