Eric Balchunas, Bloomberg’s go-to voice on exchange-traded funds, has managed to ignite one of the crypto community’s favorite debates: are ETFs really just another version of tokens?
In a lively back-and-forth on X, Balchunas argued that ETFs carry many of the same features that made tokens popular in the first place – accessibility, low fees, and yield opportunities – but with regulatory guardrails and customer support layered on top. His description of them as “tokens with benefits” drew both support and criticism.
The timing of his comments is notable. ETF launches are accelerating at a record pace this year, with more than 70 new funds arriving in a single month. That momentum has some traditional investors viewing ETFs as the safest bridge into digital assets, even as crypto natives bristle at the comparison.
Cardano community members were quick to highlight that their ecosystem already hosts tokens with “extra features” – citing projects like NMKR and FluidTokens. Others pushed back harder, pointing out that tokens are rooted in permissionless code while ETFs exist within regulatory frameworks. One commenter framed it starkly: “ETFs are law wrapped around math, tokens are math as law.”
Balchunas acknowledged that decentralization is crucial for Bitcoin, but he downplayed its role for other blockchains. Critics countered by pointing to repeated failures of regulated custodians during financial crises, arguing that code offers stronger guarantees than laws shaped by politics.
Ironically, the “tokens with benefits” conversation unfolded just as crypto ETFs were enduring another bruising week. Spot bitcoin funds saw more than $100 million pulled in a single day, led by heavy withdrawals from Fidelity’s FBTC and Ark’s ARKB. Ether products bled even more, with Fidelity’s FETH and Grayscale’s mini trust losing close to $100 million combined. The sector’s total assets slipped to around $147 billion.
Balchunas remains upbeat, suggesting ETFs are positioned to deliver long-term adoption even if short-term flows are shaky. But the debate he sparked shows a deeper divide: one side views ETFs as a safer, regulated mirror of tokens, while the other insists that true innovation lies in open, unstoppable code.
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Source: https://coindoo.com/as-etfs-bleed-assets-analyst-calls-them-better-versions-of-tokens/