Considering launching a Crypto ETF?
Here’s what you should consider first.
The introduction of spot bitcoin ETFs has sparked a wave of interest and excitement that is reshaping traditional ETF market dynamics.
White space usually does that. It ignites product development. And bitcoin ETFs are a new category that is wide open for creative exploration. It’s an exciting time for the ETF structure.
We are all wondering what else can we capture in the crypto space with ETFs? Are there other sources of return? Options, derivatives, long/short-type portfolios – if we dream it, can we build it?
As we venture into the gold rush for bitcoin access looking for what opportunities in crypto are worth exploring, it’s worth remembering that crypto isn’t like other asset classes. Expertise here is going to matter.
Consider 3 points if you are looking to build an ETF:
Know your why. Do you have unique expertise in crypto, or more broadly in a type of strategy that relates to bitcoin? Do you have deep conviction in this space? Are you curious about the future of crypto, blockchain applications and tokenization, and want to participate in that evolution? Do you have a unique idea that solves an investor problem? Or are you just suffering from FOMO?
It’s important to know what’s driving your decision to launch a bitcoin or crypto ETF because this industry may be welcoming to new participants – the bar of entry is very low – but it’s certainly not in the business of promising success to anyone. Surviving in a crowded marketplace, and growing an ETF, requires both conviction and commitment for the long term – capital, too. This is a business where grit is table stakes.
The bitcoin ETF category is an exciting frontier for ETF product development, but it is still a challenging space given the amount of regulatory scrutiny regarding this asset. So, jump right in, but make sure you have clarity about your why and conviction on the value proposition of your ETF.
Why launch an ETF with a partner.
Taking a fund from original idea through regulatory approval process to the opening bell is a big process. Even bigger is managing what comes after, such as the day-to-day operations, trading, and distribution of an ETF. As a product provider, you need to know the mechanics of launching and running an ETF – or partner with a good mechanic who’s done this before.
There are many touch points in the daily life of an ETF – from portfolio managers to fund administrators to traders and market makers to attorneys, distributors and exchanges – and each of these points require excellence in execution for an ETF to deliver the best results to the end investor. When back tests become live track records, results are what investors care about. Product and market expertise will matter, as will be having good relationships across the ETF ecosystem. The good news is the ETF industry operates in an environment of competitive collaboration – folks help each other out to succeed. Partners abound. Do your due diligence and choose the right partners for you.
Why launch an ETF with Tidal.
ETFs are a relationship business, where trust and confidence is built over time. Tidal has a long track record of being an innovator and a leader in helping advisors, institutions and entrepreneurs bring their vision to market in an ETF wrapper. So, why consider Tidal as your partner for a crypto ETF?
- Why launch a crypto ETF.
It’s important to know what’s driving your decision to launch a bitcoin or crypto ETF because this industry may be welcoming to new participants – the bar of entry is very low – but it’s certainly not in the business of promising success to anyone. Surviving in a crowded marketplace, and growing an ETF, requires both conviction and commitment for the long term – capital, too. This is a business where grit is table stakes.
The bitcoin ETF category is an exciting frontier for ETF product development, but it is still a challenging space given the amount of regulatory scrutiny regarding this asset. So, jump right in, but make sure you have clarity about your why and conviction on the value proposition of your ETF.
There are many touch points in the daily life of an ETF – from portfolio managers to fund administrators to traders and market makers to attorneys, distributors and exchanges – and each of these points require excellence in execution for an ETF to deliver the best results to the end investor. When back tests become live track records, results are what investors care about. Product and market expertise will matter, as will be having good relationships across the ETF ecosystem. The good news is the ETF industry operates in an environment of competitive collaboration – folks help each other out to succeed. Partners abound. Do your due diligence and choose the right partners for you.
- Expertise In the bitcoin space, Tidal was the first to help a global crypto expert bring to market a bitcoin futures ETF in a 33 Act structure – still the only of its kind. Defining and building the plumbing needed to make that happen is expertise that can now benefit new product development in the space. We’ve done the first-of-a-kind building, we’ve been through the regulatory process, and we’ve launched a successful product that has a best-in-class live track record.
- Agility and Creativity Tidal is an ETF disruptor. Our ETF partners aren’t in the business of building clone ETFs – they are in the business of pushing the boundaries of what access can look like. That’s why they come to Tidal. The team is nimble and flexible, with many years of expertise across asset classes, strategies and functionalities. We are the creatives in an industry anchored on passive index replication, tapping into a diverse team to help foster innovation in the ETF space.
- Size Tidal has more than 120 ETFs in its platform today from more than 50 unique providers. The firm is big enough to offer the benefits of scale, and small enough to deliver nimble, customized white glove service. We are a boutique partner with large-shop capabilities, and more importantly we are driven by a conviction in the benefits of the ETF structure for end investors.
There’s no telling where product innovation in ETF ends, there’s only knowing we are here for it.
