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 are 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.
— 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 argues that biases represent one of the most valuable tools for understanding markets.
“Simplistic but unit bias psychology matters a lot. I think about this a lot,” he further added.
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 before the start of business 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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