On April 9, 2024, the first day of the three-day Paris Blockchain Summit, Jan van Eck, CEO of VanEck, shared valuable information about the factors influencing the cryptocurrency market during an enlightening segment on CoinDesk TV’s “Markets Daily” show.
The VanEck chief executive pointed out that Europe has taken a leading role in crypto regulations, allowing VanEck to introduce a Bitcoin Exchange-Traded Note (ETN) about three years ago and now managing a total of 12 such investment vehicles that follow the price of one or more digital tokens.
After the recent authorization of Bitcoin spot ETFs in the United States, Van Eck was taken aback by the large inflows. He explained this phenomenon by pointing to the high retail interest in Bitcoin that had been building up and Bitcoin investors moving their coins from personal storage or exchanges into these ETFs. VanEck admitted that they had missed out on some of these initial investments because they didn’t waive fees, which some other issuers chose to do.
Van Eck thinks it will be a while before institutional demand for Bitcoin SPOT ETFs grows stronger, as financial advisors have not yet given their blessing for broker-dealers to suggest these investments. Furthermore, model allocators, responsible for making buying and selling decisions for numerous advisors, are only just gaining permission to include Bitcoin in their fund prospectuses.
Moving forward, van Eck expresses confidence in Bitcoin’s potential to reach new record highs in 2023. He bases his optimism on broader economic conditions like the Federal Reserve’s monetary policy and Bitcoin’s inherent features, specifically the upcoming halving event. Surprisingly, he pointed out that roughly one-third of Bitcoin’s price increase since the introduction of US Bitcoin ETFs has taken place outside of regular US trading hours, implying that these ETFs may not be solely responsible for price fluctuations.
Van Eck pointed out that the SEC’s approval process for Ether ETFs seems harder than that for Bitcoin ETFs. He specifically mentioned the slow reaction from the SEC towards applications from potential issuers, including their own filing (S1).
According to van Eck’s perspective, the absence of communication from the SEC suggests a low probability that Ethereum ETFs with a May approval deadline will be granted approval. Properly organizing and preparing disclosure documents is crucial for making any advancements in this regard.
“We’ve submitted our S1 filing, but haven’t received any updates yet. This might indicate a delay. The process can’t move forward without first organizing and submitting the necessary disclosure documents.”
Van Eck highlights the significant advancement in the crypto industry brought about by the reasonable fees on L1 blockchains like Solana and layer-2 solutions such as Polygon, making it feasible to develop large-scale and budget-friendly applications using blockchain technology.
“An essential tale from 2023 that often goes unnoticed yet deserves more attention is this: transaction fees have become reasonably priced with platforms like Solana and layer 2 solutions.”
imagine you have to pay $50 every week to fill up your car with gas. That’s manageable. But then one week, the price jumps to $600. That’s effectively what high gas fees are like on Ethereum.”
VanEck isn’t preparing to introduce more cryptocurrency ETFs in the U.S. at this time, but they’ve built a robust selection in Europe instead. Now, they’re exploring actively managed partnerships to seize market prospects.
To conclude, van Eck discussed his son’s recent introduction of a US dollar-backed digital currency named Agora. He underscored the significance of regulatory compliance and clear bookkeeping in the stablecoin sector, which VanEck intends to ensure through their reserve management solutions. Van Eck is confident that there’s potential for rivalry in the stablecoin industry, but gaining a large user base, active trading, and a favorable ecosystem are essential for prosperity.
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2024-04-10 13:22