The price of a single Bitcoin often acts as a deterrent for potential investors who lean towards owning complete units due to a psychological phenomenon known as unit bias, as highlighted by VanEck advisor Gabor Gurbacs.
In a series of posts on X (formerly Twitter), Gurbacs pointed out that many people remain unaware that they can purchase fractions of a Bitcoin, and there is a significant preference for owning whole assets.
Gurbacs expressed his surprise, stating, “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.”
Currently, Bitcoin is trading at approximately $44,000.
One potential solution to address this unit bias psychology, according to Gurbacs, is the introduction of Bitcoin exchange-traded funds (ETFs).
These ETFs typically debut with a double-digit Net Asset Value (NAV), often around $25.
Hypothetically, if Bitcoin ETFs were to launch at around $44 per share, eliminating three zeros, it would significantly reduce the unit bias, making Bitcoin exposure appear more affordable.
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Gurbacs emphasized that owning a complete share seems more appealing to investors than holding a fraction, stating, “Owning a full share feels better than owning 0.001 Bitcoin.
Se”ems like a small thing but it’s a big thing.” He also acknowledged that while this debate isn’t new, biases play a crucial role in understanding market behavior.
Meanwhile, there is ongoing anticipation within the cryptocurrency industry regarding the United States Securities and Exchange Commission (SEC) potentially approving a spot Bitcoin ETF in the near future.
However, the broader financial services sector remains more skeptical about the likelihood of this happening.
A recent survey conducted by Bitwise, involving responses from 437 financial advisers, revealed that only 39% of U.S. financial advisers anticipate the approval of a Bitcoin ETF in 2024.
As for the progress on a spot Bitcoin ETF debut on Wall Street, final revisions from asset managers are expected by the morning of January 8, with these revisions to be submitted through S-1 filings.
Applicants are also anticipated to disclose remaining fees and tickers, although BlackRock has not yet revealed the associated fees for its ETF.
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