Rumors about an Exchange Traded Fund (ETF) that follows the best NFT collections, started with swirls, from a post on social media made by Pudgy Penguins CEO Luca Netz. But ETF -Emitents and Markt experts told Decrypt It is unlikely that such a fund is imminent because traditional investors think that NFT’s are ‘nonsense’.
With an American crypto reserve who is said to be on the horizon after an announcement by President Trump, NFT enthusiasts started to wonder if an NFT reserve could ever be a possibility. In response, Netz retweeted the post and added that he worked on “something for our JPEGS” – speculation that an NFT ETF was on the road.
But experts gave cold water the idea in a series of interviews with Decrypt.
“An NFT ETF would be confronted for considerable technical and structural challenges, mainly because of the illiquidity of NFTs,” said James Butterfill, head of research on Coinshares. He explained that such illness “makes price discovery and market formation almost impossible for the reason why ETFs of real estate are rare.”
More chance to be a kind of ETF than of course reserve, but Great American JPEG Reserve simply rolls off the tongue
– Tylerd
50 (@TyLer_Did_it) 2 March 2025
Ryan Rasmussen, head of research at ETF provider Bitwise Asset Management, explained that technical challenges would mean that funds should construct price methods, because NFTs are not equally priced across the board. He pointed to the NFT index of Bitwise as an example of this in action.
Similarly, the illiquidity of the assets prevents the issuer from entering a position safely and leaves without influencing the market. That said, Rasmussen believes that it is “possible” despite the technical challenge.
The reason that an ETF is created is to help bring liquidity in a market or activa class. Spot US Bitcoin ETFs, for example, currently have $ 103.8 billion assets under management, according to Coinglass, and have seen billions of dollars in volume every day since October. Much of that part comes from investors who would otherwise probably not invest in crypto, said Rasmussen, adding that there is not the same demand for NFTs.
“From my experience, the conversations we have, are still stuck in the NFT -Bust -newspaper heads after 2021,” he explained. “The idea that traditional investors are looking for exposure to NFTs as an ETF is not that credible for me.”
Chris Akhavam, Chief Business Officer at NFT Marketplace Magic Eden, argued that the chances of an NFT ETF will pick up in the midst of the next large growth run of the sector. He explained that the current market does not have enough liquidity to support the extra requirement that an ETF could make.
“I think the chance that an NFT ETF will pass this year is very low, or just unlikely that will happen.” Told Rasmussen DecryptAdding that: “I just think that most investors nowadays believe that NFT’s nonsense are nonsense. It is not an opinion that I holds, but I hear it. ‘
Hong provider of Hong Kong Etf Hashkey repeated a similar sentiment, telling Decrypt That “NFT ETFs are probably a long -term prospect instead of an immediate reality”, because the market is still young and adult.
However, that does not prevent market participants dreaming.
An NFT ETF would offer legitimacy and possible growth for an activa class that has been defeated from the Highs of 2021 – much such as Bitcoin and Ethereum before their ETF goods inspections.
“An NFT ETF would be seen as an incredibly bullish for space,” said Akhavam. “I would expect a lot of buy -requirement NFTs to the back of ETF announcements, because people would see it as an important validation of the activa class. This would stimulate meaningful growth in NFT -Liquidity and market hoods. “
Published by Stacy Elliott.
