ETF Prime: Nadig’s 2024 ETF Predictions and More  

To open the podcast, Geraci brought on VettaFi’s Financial Futurist Dave Nadig to discuss some of his predictions for 2024. Geraci mentions that the first prediction that Nadig brought to the show is one that he would prefer to avoid talking about, and that topic is that 2024 is an election year. Nadig predicts there will be a ton of media coverage about how the markets will be affected by certain officials being elected. He then highlights that, in his experience, most of this media coverage is not always correct. Nadig then shares the main prediction he has when following how the election will affect the markets.

“There is going to be a bull market on people trying to sell you on their product based on how they think you’re going to vote,” he said.

Nadig shares that there are several different products in the market that support one party or another, and he believes these issuers will use this to their advantage given that 2024 is an election year. He also states that he would suggest investors avoid these products because he isn’t convinced any of them are playable or an opportunity to make money. In addition, Geraci asks Nadig for his take on how the political landscape will affect ESG ETFs.

The conversation then shifts gears when Geraci and Nadig move on to another one of Nadig’s predictions for 2024, which is the debut of spot bitcoin ETFs. The two share that the expectation is that this style of product will come to market in early 2024, and Nadig believes that spot ethereum ETFs will follow suit soon after. Nadig mentions that while he sees the approval of these ETFs as progress for the industry, there are still some significant regulatory issues that need to be addressed.

“The decentralized economy still has no regulatory structures,” he noted.

Nadig shares that while these products may be approved in early 2024, there are still several things that need to happen to be able to take full advantage of cryptocurrency’s overall promise. Additionally, he goes in-depth on his thoughts regarding the approval process of a product like spot bitcoin ETFs.

Geraci then highlights another one of the predictions Nadig has for 2024. The prediction he shares from Nadig is that active ETFs will slow down and underperform in the new year. Geraci highlights how active ETFs have been one of the most-talked-about topics on ETF Prime this year. He attributes this to the relevance of these products in the market in 2023. He then asks Nadig why he believes momentum around active ETFs will slow down in 2024.

“We will continue to see conversions for sure, and we will continue to see growth. What I don’t think we are going to see is another year of 20-25% AUM flow directly into active products,” Nadig explained.

He highlights that the significant flows that active ETFs have seen this year could be attributed to options-overlay strategies. Nadig adds that he believes the rise of these products will also slow down in the new year. Furthermore, the duo explores the future of active investing and more of Nadig’s predictions for 2024.

To close this week’s podcast, Geraci brings on Steven McClurg, chief investment officer at Valkyrie. The pair discuss the possible approval of spot bitcoin ETFs. Before the conversation, Geraci highlighted how Valkyrie has two ETFs with about $75 million in assets. The firm’s current lineup includes the Valkyrie Bitcoin and Ether Strategy ETF (BTF A-) and the Valkyrie Bitcoin Miners ETF (WGMI A-). Geraci then asks McClurg to give an update on how the past two years have gone for his firm.

“It’s been a roller coaster, I will tell you that,” McClurg said.

He then walks Geraci through how the past two years have gone for him and his firm. He specifically shared the process of trying to get its proposed bitcoin products approved by the SEC. The pair then dove into where the spot bitcoin ETF situation currently stands, and they lay out a possible timeline for investors to expect approval. To close their conversation, Geraci and McClurg discuss several intricacies of the filings, the approval process, and more.

For more ETF Prime podcast episodes, visit the ETF Prime Channel.