- 90% of Bitcoin ETF inflows are still from retail investors, according to VanEck CEO Jan van Eck
- VanEck’s CEO believes convenience, safety, and affordability are major reasons investors prefer Bitcoin ETFs over directly buying and managing BTC themselves
- Jan van Eck says his firm views Bitcoin as complementing gold as a store of value in investment portfolios
The launch of Bitcoin exchange-traded funds (ETFs) in 2024 has attracted significant investment, but the money has come almost exclusively from retail investors rather than institutions according to Jan van Eck, CEO of investment management firm VanEck.
Inflows Exceeding Expectations
Speaking at Paris Blockchain Week, van Eck said the initial success of Bitcoin ETFs, which have seen billions in inflows on some days since launching, surpassed his expectations. However, he believes these inflows have not yet been significantly influenced by traditional finance (TradFi) players.
The Bitcoin Whales Stay Away
“I was surprised, but I don’t think it’s traditional investors yet. I still think 90% of the flows are retail,” said van Eck. “You’ve had some Bitcoin whales and some other institutions move some assets in, but they were already exposed to Bitcoin.”
No Bank Approvals Yet
The CEO added that no major US banks have officially approved or allowed their financial advisors to recommend Bitcoin to clients so far.
A Month Until Institutional Entry?
Van Eck said the next month could potentially see some major institutional investments from banks and traditional firms, but the landscape remains in its infancy. “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,” he stated.
The Benefits of Bitcoin ETFs
When asked why investors would prefer a Bitcoin ETF over purchasing and managing BTC directly, van Eck highlighted convenience as a major factor. Investors want fund managers to handle entire portfolios.
“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,” he explained.
Following in His Father’s Footsteps
VanEck was founded in 1955 by John van Eck, who started the first gold fund in the US in 1968. Jan van Eck said his father’s fund boomed as inflation soared in the 1970s.
Ever on the Lookout for New Assets
Van Eck said his tendency to be a “paranoid” business person has kept him alert to any emerging assets that could rival gold. In 2017, the firm recognized Bitcoin’s potential to complement gold in portfolios.
Political and Technological Trends Drive Markets
According to van Eck, his firm’s big picture approach recognizes that political, economic, and technological trends drive financial markets. Bitcoin became the first emerging asset since the 2010s that warranted attention.
Bitcoin as a Store of Value
“I’m not like super in love with [Bitcoin] or anything, I just think that at times you really want to have a store of value in your portfolio. And that’s what I care about – people’s investment savings,” said van Eck. He argues Bitcoin may be a better store of value than gold today.
Don’t Overstate the ETF Impact
While Bitcoin’s appreciation in 2022 has been linked to the launch of ETFs, van Eck cautions against overstating their impact. “The Bitcoin market is more global and much deeper than just being influenced by the ETFs,” he remarked.
Global Markets at Play
Van Eck pointed to a sharp BTC price rise in early April that occurred outside US trading hours, indicating the influence of Asian markets. The ETF impact should therefore not be overemphasized.
