VanEck’s Love-Hate Relationship With Bitcoin

Bitcoin, cryptocurrency, blockchain.

If these words are confusing for you, you’re not alone. But we think you’d be silly to ignore them entirely. Ignorance may be bliss, but ludicrous gains are far sweeter. And ludicrous is definitely not hyperbole.

Bitcoin reached a new milestone this week, breaking the US$4,000 mark for the first time. It continued to climb, peaking around US4,400 before finally stalling its run. Currently it’s trading around US$4,175, having steadied the ship.

However, talk of bubbles, confusion, and uncertainty still continue to spook investors. But attitudes are slowly changing. Sometimes under bizarre circumstances. We can sympathise though — we’ve gone a bit crypto mad ourselves. Money management firm VanEck might have just taken the cake though.

According to CNBC, last Thursday the company’s portfolio manager for its International Investors Gold Fund (INIVX), Joe Foster, lashed out at bitcoin.

Bitcoin and other digital currencies are a fad that has attracted the attention of programmers, speculators and early adopters.

It is my opinion that governments will not allow digital currencies to reach the critical mass needed to challenge the utility of fiat currencies such as the dollar.

                At best, digital currencies may eventually occupy some middle ground as a niche product.

                At worst, they become a failed experiment that ends in tears.

Now, we can understand the arguments Mr Foster is promoting. We don’t agree with them, but we can see where his concern stems from. We’re not stupid enough to believe the crypto market is risk free — far from it. We do, however, think Mr Foster is underestimating bitcoin’s worth.

Funnily enough, it seems his employer feels the same way. The following day after Mr Foster’s comments, VanEck applied for a bitcoin-based exchange-traded fund (ETF).

Whoops — hope someone didn’t lose their job for that miscommunication.

CNBC reached out to VanEck for a statement regarding the blunder. VanEck obliged, trying to rectify the opposing messages.

Joe Foster makes a great case for gold relative to bitcoin as a currency and store of value.

VanEck believes that the technology underlying digital assets, known as distributed ledger technology, has tremendous potential to revolutionize finance and trade.

So, while Mr Foster may still be in denial about digital currencies, clearly VanEck isn’t. Which is the real story here.

VanEck’s Bitcoin ETF isn’t the first to apply either. The US Securities and Exchange Commission (SEC) has already knocked back two similar funds previously. It’s no secret that the SEC isn’t a fan of bitcoin though.

What matters, though, is the intent. These are big investment firms trying to get in early. When — because honestly, we believe it’s only a matter of time — the SEC starts approving these funds, that’s when things really get interesting.

It means a whole heap of money is going to flood into bitcoin and the wider crypto markets. A no-fuss, easy alterative for your everyday investor.

Now, you might be thinking ‘Perfect — that is exactly what I need.’ Sure, it might be easy, but you’ll just be riding the wave. Why not get in now? Become a proactive investor; the kind who’s willing to take the plunge.

With a little effort and research, you can get involved before the masses finally pile in. It’s simpler than you might think, and we’re here to make it even simpler.

Sam Volkering and Ryan Dinse are two of the best when it comes to bitcoin and cryptos. Their new advisory service, Secret Crypto Network, breaks down all the jargon and technical analysis to make it as easy as possible.

To find out more, go here.


Ryan Clarkson-Ledward,
Junior Analyst, Money Morning

Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

Ryan is also the Editor of Australian Small-Cap Investigator, a stock tipping newsletter that hunts down promising small-cap stocks by dissecting the latest events affecting the world.

To find out more about the publications Ryan works on and how you can subscribe, please click on the corresponding link here:

Money Morning Australia