In the realm of cryptocurrency, a unique psychological phenomenon known as “unit bias” has been identified as a barrier for investors. Gabor Gurbacs, a strategist at investment firm VanEck, sheds light on the tendency of investors to prefer owning whole units of an asset, which can make the high price of a single Bitcoin daunting. This has led to a reluctance among some potential investors to purchase mere fractions of the digital currency.
Gurbacs proposes a solution: Bitcoin Exchange-Traded Funds (ETFs). These financial products could democratize investment in Bitcoin, allowing individuals to invest in the cryptocurrency without the need to buy a whole coin. “It’s about the psychological satisfaction of owning ‘one’ of something rather than ‘0.001’,” Gurbacs explains.
As the investment community looks on, there’s a buzz of anticipation over the possibility that the U.S. Securities and Exchange Commission (SEC) might approve a spot Bitcoin ETF in the near future. This move could potentially pave the way for broader acceptance and investment in Bitcoin.
While the financial services industry remains cautious, with a Bitwise survey indicating that only 39% of financial advisors expect an ETF approval this year, the final preparations are being made. Asset managers are due to submit their final revisions for a potential ETF launch, including fees and tickers, by January 8.
