According to VanEck advisor Gabor Garbacs, the overall price of Bitcoin (BTC) has fallen due to unit-bias psychology, which favors owning a full unit, leading to a potential reluctance to buy just a portion of the cryptocurrency. It is said that this could deter some investors. He suggests that Bitcoin exchange-traded funds (ETFs) are a solution to this challenge.
In a series of posts on This suggests that there are even more.
“I was surprised that a significant number of people didn't know they could own fractions of a Bitcoin, and even more, that there are people who don't want to own fractions of a coin.”
Bitcoin is trading at ~$44,000 today.
ETFs typically start at a double-digit NAV, often $25. So, let's say a Bitcoin ETF launches at $44 per share without the three zeros.
This eliminates unit bias to a large extent. Suddenly, Bitcoin exposure looks more affordable.
simple…
— Gabor Gurbacs (@gaborgurbacs) January 6, 2024
Moreover, he reiterates that for investors, owning the entirety of something looks more attractive than just a portion of the investment.
“Owning a whole stock feels better than owning 0.001 Bitcoin. It seems like a small thing, but this is a big deal,” he said.
Gurbax acknowledges that this argument is not new, but argues that bias is one of the most valuable tools for understanding markets.
“Simple but unit bias psychology is very important. I think about this a lot,” he further added.
Related: BlackRock to cut 3% of workforce before Bitcoin ETF deadline: Report
Meanwhile, the cryptocurrency industry is filled with high expectations that the US Securities and Exchange Commission (SEC) will greenlight a spot Bitcoin ETF within the next week.
But the broader financial services industry is more skeptical about that possibility.
A recent survey by Bitwise, which included responses from 437 financial advisors, found that only 39% of U.S. financial advisors expect to approve Bitcoin ETFs this year.
Cointelegraph recently reported that the final stages of the Spot Bitcoin ETF’s Wall Street debut are underway, with final revisions by the asset manager expected by the morning of January 8th.
Amendments must be submitted through an S-1 application before operations begin, and applicants will be required to disclose remaining fees and tickers.
It was noted that BlackRock has not yet disclosed fees associated with the ETF.
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