In 2024, Bitcoin exchange-traded funds (ETFs) have drawn considerable attention, primarily fueled by the retail sector, while major banks and traditional financial institutions remain on the sidelines.
During an interview at Paris Blockchain Week, VanEck CEO Jan van Eck shared insights with Cointelegraph about the dynamics shaping the Bitcoin ETF market in the United States.
Jan van Eck expressed his surprise at the rapid success and high volume of capital flowing into these ETFs, which have seen days with inflows in the billions of dollars.
“I was surprised, but I don’t think it’s traditional investors yet.
“I still think 90% of the flows are retail. You’ve had some Bitcoin whales and some other institutions move some assets in, but they were already exposed to Bitcoin,” he commented.
The CEO noted the absence of U.S. banks in the Bitcoin ETF space, as they have not yet permitted their financial advisers to recommend such investments to clients.
He anticipates potential shifts in the coming month with possible entries from big institutional investors, but he remains cautious, remarking on the nascency of the Bitcoin ETF market.
“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,” van Eck stated.
Addressing the advantages of Bitcoin ETFs over direct purchases of Bitcoin, van Eck highlighted the benefits of convenience, safety, and affordability.
He pointed out the cost benefits of ETFs, noting, “Convenience, safety and affordability.
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.”
VanEck, the firm founded by Jan’s father, John van Eck, in 1955, has a history of pioneering new investment avenues, starting with the first gold fund in the U.S. during 1968.
Drawing from his father’s legacy and responding to market trends, Jan van Eck has adopted a cautious yet opportunistic approach to emerging assets like Bitcoin.
“In 2017, we said Bitcoin will not replace gold, but it will significantly complement it in people’s portfolios,” he asserted.
Van Eck also touched on broader economic issues, noting that Bitcoin is increasingly seen as a reliable store of value, potentially more so than gold in the current economic climate.
He also pointed to significant fiscal challenges facing the U.S., suggesting that these will influence market dynamics soon.
Despite the buzz around Bitcoin ETFs, van Eck remains measured in his assessment of their impact, indicating that the global and deep nature of the Bitcoin market limits the influence of U.S.-based ETFs alone.