Bitcoin ETFs will solve unit bias psychology, says VanEck advisor

The price of one whole Bitcoin ( BTC ) can deter potential investors who are hesitant to buy only a fraction of the cryptocurrency due to unit bias psychology, which favors owning complete units, according to VanEck advisor Gabor Gurbacs. He suggests that Bitcoin exchange-traded funds (ETF) are a solution to this challenge.

In a series of posts on X (formerly Twitter), Gurbacs stated that many people are still unaware they can own a part of a Bitcoin, while suggesting there is even more individuals who prefer to only own complete assets:

“I was surprised that a good number of people didn’t know that one can own a fraction of a Bitcoin and even more frequently people didn’t want to own a fraction of a coin.”

Bitcoin is trading at ~$44,000 today.

ETFs usually launch with a double-digit NAV, often $25. So, say hypothetically that Bitcoin ETFs would launch at $44 per share, removing 3 zeros.

That removes a lot of unit bias. Suddenly Bitcoin exposure looks more affordable.

Simplistic…

— Gabor Gurbacs (@gaborgurbacs) January 6, 2024

Furthermore, he reiterates that it seems more appealing to investors to own a whole of something, as opposed to a fraction of an investment.

“Owning a full share feels better than owning 0.001 Bitcoin. Seems like a small thing but it’s a big thing,” he stated.

Although Gurbacs recognizes that this debate is not new, he argue that biases represent one of the most valuable tools for understanding markets.

Related: BlackRock to slash 3% of workforce ahead of Bitcoin ETF deadline: Report

Meanwhile, the crypto industry is filled with high expectations that the United States Securities and Exchange Commission (SEC) will greenlight a spot Bitcoin ETF in the upcoming week.

However, the broader financial services industry is more skeptical of its chances. 

In a recent survey by Bitwise that included responses from 437 financial advisors, findings showed that merely 39% of U.S. financial advisors anticipate the approval of a Bitcoin ETF this year.

Cointelegraph recently reported that the final steps for a spot Bitcoin ETF debut on Wall Street are in progress, with final revisions from asset managers expected by the morning of Jan. 8.

The revisions must be submitted through S-1 filings no later than 8:00 a.m. Eastern Time, or 13:00 UTC, and applicants are expected to reveal remaining fees and tickers.

It was noted that BlackRock has not yet disclosed the fees associated with its ETF.

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