Bitcoin Price Consolidates as VanEck Shines Spotlight Back on ETF Debate

Bitcoin started off the weekend on a tepid note, as trade volumes fell sharply amid a dearth of fresh trading catalysts. The debate over bitcoin exchange-traded funds (ETFs) intensified after a senior manager at VanEck touted the potential of the new asset class.

BTC/USD Update

Bitcoin traded within a narrow range on Saturday, with a peak-to-trough spread of only $55, according to Bitfinex data. The leading digital currency by market capitalization was last seen trading at $6,450, up 0.5% on the day.

The bitcoin price experienced a bullish revival earlier in the week, but that quickly dissipated as markets pulled back from oversold levels. BTC peaked near three-week highs on Wednesday before the bulls slammed on the breaks, sending prices back to the low $6,400 region.

In the last 24 hours, trade volumes have dropped by roughly 15% to $3.8 billion, according to CoinMarketCap. Daily turnover reached $3.9 billion on Saturday.

At current prices, bitcoin has a total market capitalization of $111.2 billion, which represents 52.3% of the entire cryptocurrency market. The total market cap for all coins in circulation reached $212.9 billion on Saturday.

Bitcoin ETF Approval Likely: VanEck

The U.S. Securities Exchange Commission (SEC) should treat bitcoin ETF proposals as an opportunity to regulate the cryptocurrency market and make the asset class more resistant to manipulation, according to Gabor Gurbacs, VanEck’s Director of Digital Asset Strategy.

In a recent interview with CNBC Crypto Trader, Gurbacs said the fund being developed by VanEck addresses all of the reservations federal regulators have with crypto securitization. He explained: “What sets our ETF apart is that it’s a physical bitcoin ETF. So, it stays true to the bitcoin you own in underlying. It’s fully insured so if there is any theft, hacks or losses; then the insurance covers it.”

In terms of how the ETF will be priced, Gurbacs said the asset will rely on a fully regulated indexing subsidiary. Given that the ETF is geared toward institutional investors, it has a cap of 25 bitcoins per basket.

Earlier this year, VanEck and SolidX proposed a physically-backed bitcoin ETF that many in the crypto community felt stood the best chance of being approved by regulators. While the SEC has rejected all applications thus far, Gurbacs said VanEck’s physically-backed fund is close to being approved. The agency is set to deliver a verdict on Dec. 29, though many believe it will be delayed until February.

Gurbacs is confident the VanEck ETF will be approved because the fund manager is building the right market structure for digital assets, which is in line with the corporate strategy stretching back decades.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi