Gabor Gurbacs, director of Digital Asset Strategy at VanEck, says Bitcoin has cemented its status as the new digital gold, and is likely to lure traditional investors away from precious metals.
VanEck, a global investment money management firm based in New York, has approximately $46 billion in assets under management, ranking as the 10th largest ETF issuer in the US in recent years. As a leader in gold investments, the company launched the nation’s first gold equity fund (INIVX) in 1968 and also issued the first gold miners ETF (GDX) in 2006.
“Investors do refer to Bitcoin as a form of digital gold, and gold today has around $7 trillion outstanding,” Gurbacs told CNBC. “If you take, say 5 to 10%, I’ll let everyone do the math – Bitcoin has upside.”
Bitcoin’s current market cap is around $132 billion, according to CoinMarketCap. If gold investors were to move 10% of their assets over to Bitcoin, BTC’s market cap would more than triple.
In order for that shift to take place, Gurbacs says Bitcoin will need to continue to develop its credibility to institutional investors. “I’d like to stress that investible liquid and properly regulated investment products are necessary to get there,” he said.
Gurbacs, who has held several research positions at MIT and Harvard, is optimistic that the crypto market is well on its way to maturing in the necessary ways. “We believe that there is sufficient liquidity,” Gurbacks said. “We believe there is pricing benchmarks. We believe there is a way to integrate Bitcoin into the financial ecosystem that we are used to for ETFs, stocks, bonds and commodities.”
A new report by the Head of Commodity Research at Geojit Financial Services, the first investment company in India to launch commodity futures trading in gold and silver, says silver is already losing ground in part due to the cryptocurrency craze.
“Silver’s appeal as an investment avenue has dimmed, with the demand for investing in silver coin and bar contracting 27 percent last year.
A strong global equity market and new investment elements such as cryptocurrencies have curbed the demand for metals like silver.”
Bitcoin is up about 3% on CoinMarketCap at time of publishing, at around $7,732.