On this week’s episode of ETF Prime, host Nate Geraci is joined by president of ETF Trends and ETF Database, Tom Hendrickson, to offer insight regarding the launch of the very first U.S.-listed bitcoin ETF and what that will mean for investors. Geraci also speaks with Nasdaq’s Giang Bui about her perspective on the bitcoin ETF race, as well as ETF innovation and education. Finally, Freedom Day Solutions’ Ryan Krueger spotlights the Freedom Day Dividend ETF (MBOX ).
Although it is a huge deal to see the arrival of the ProShares Bitcoin Strategy ETF (BITO), it isn’t the physically backed ETF that investors had been hoping for. At this point, the SEC is only allowing futures-based bitcoin ETFs. But it’s a start, says Geraci, and the approval has been a long time coming.
Hendrickson believes this to be a pretty phenomenal day for financial advisors. Considering that 40% of America’s wealth is controlled by financial advisors, putting bitcoin into an ETF wrapper unlocks the asset class for a much wider range of potential investors.
Hendrickson points out that ETF Trends has seen a “10x” increase in engagement on educational content about the bitcoin ecosystem since the start of 2021. “The demand here for education is absolutely undeniable,” he adds.
“I think this is a really important milestone,” says Hendrickson. “I’m excited for a whole new way in which advisors and their clients can access the market. Is it a perfect product for everyone? It may not be, but choice is incredibly important, and I think that it’s undeniable that there’s more choice today than yesterday. That’s a great thing for the industry.”
The Great Bitcoin ETF Race
Later in this show, Giang Bui, head of U.S. exchange traded products at Nasdaq, offers more context around Bitcoin futures ETFs; their exchange has been working with Valkyrie on the Valkyrie Bitcoin Strategy ETF (BTFD), another futures-based Bitcoin fund.
She provides insight into the role an exchange has to play in supporting ETF growth and innovation, along with what’s going on across the ETF space in general. Her team is made up of ETF veterans and bitcoin natives that have been involved in many aspects across the digital asset ecosystem. Together, they partner with issuers, market makers, law firms, and other market participants to bring a new listing to market.
As Bui explains, “We’re aligned with issuers in our commitment to advance key trends… Crypto is one of them, but we’re involved in many different aspects of the ETF ecosystem.”
This conversation goes on to cover what it means to be listed on the exchange and what differentiates Nasdaq from others in regards to the kinds of issuers they partner with. There’s also talk of how Nasdaq’s efforts to create content and market appropriately also play a key role in assuring certain levels of success.
Opening MBOX
Closing out the show is Ryan Krueger, co-founder and CEO of Freedom Day Solutions. But what is a ‘Freedom Day’? Krueger explains, “Freedom Day is the day when multiple streams of income exceed the cost of living for an investor. It must include annual pay raises that need to far exceed inflation.”
For advisors, Krueger believes that the biggest income challenges comes down to finding sustainable income streams that are rising. That’s why his firm launched MBOX back in May.
As Krueger explains, the origins stem from his memory of an old-fashioned mailbox and the level of expectation that can be seen from physically opening that container. “Mailbox money, to me, is getting paid every quarter. It is a reflection of what is already happening with clear evidence.” In dividends, “it is free cash flow, rather than projections.”
Krueger and Geraci continue to delve into this concept of mailbox money, how MBOX works as an actively managed fund, and more.
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