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Top ETF Trends Of 2024: 'Buffer Strategies' Boom As Bitcoin ETFs Make Waves

Author: Khyathi Dalal | August 28, 2024 03:24pm

Senior Bloomberg ETF analyst Eric Balchunas spoke about the continuous innovation in ETF industry in 2024, highlighting buffer strategies emerging as a major trend. 

What Happened: Speaking on the ETF Prime podcast, Balchunas dubbed these products “boomer drugs” for their ability to eliminate investor worry.

“Buffer ETFs have a Xanax-like quality,” Balchunas said. “What they really do is eliminate your worry, just like a Xanax will probably get you through turbulence on an airplane.”

These ETFs, which use options to provide downside protection while capping upside gains, have grown to $50 billion in assets. Balchunas believes they are “stealing money” from annuities, structured products and even bonds as investors seek alternatives to traditional portfolio hedges.

Another key trend is the rise of leveraged single-stock ETFs, which Balchunas calls “hot sauce” products. The Nvidia 2x leveraged ETF (NASDAQ:NVDL) has already amassed $6 billion in assets.

Benzinga Future of Digital Assets conference

Also Read: Donald Trump’s Pro-Bitcoin Stance Influenced Ethereum ETF Approval, Analyst Posits

Despite these niche products gaining traction, core index ETFs continue to dominate flows. The Vanguard S&P 500 ETF (NASDAQ:VOO) has taken in $60 billion year-to-date, on pace to potentially double the annual inflow record.

However, the biggest story in the ETF world this year may be the runaway success of spot Bitcoin (CRYPTO: BTC) ETFs. Since their January launch, these products have seen a staggering $18 billion in net inflows over just eight months.

The success of Bitcoin ETFs has silenced many critics and demonstrated the pent-up demand for regulated crypto investment vehicles. 

With daily trading volumes regularly exceeding $1 billion, these products have quickly become some of the most actively traded ETFs in the market.

What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.

Read Next: 

Image: Shutterstock

Posted In: $BTC NVDL VOO

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