Valkyrie’s Leah Wald on Crypto ETFs, Markets, & Regulation
On this episode of ETF Prime, VettaFi’s Tom Hendrickson and Emil Tarazi of LOGICLY discuss the recent acquisition with host Nate Geraci. The pair also talk about the spiking interest in Treasury ETFs. Valkyrie’s Leah Wald follows with a look at the crypto sphere currently, regulation, and market dynamics.
VettaFi Acquires LOGICLY
Tom Hendrickson, President of VettaFi, went into detail about the recent acquisition of LOGICLY. “We’re always looking for ways to add to the suite of capabilities… that can provide value to our B to C audience.”
This includes portfolio construction capabilities, researching before making investment decisions, and more. LOGICLY brings a culture of “market expertise, with deep technical expertise,” Hendrickson said.
LOGICLY was particularly appealing as an acquisition for a number of reasons, according to Hendrickson. A primary attractor was the LOGICLY toolset that enables more in-depth research and analysis and complements the existing VettaFi platform.
Another benefit is the global exposure and coverage that the analytics company provides, covering over 13,000 funds. A third benefit is one that targets issuer partners and helps them tell their story and reach advisors better.
“LOGICLY was started to help ETF issuers tell the story about their funds,” explained Emil Tarazi, head of product at LOGICLY. This includes tools to support internal wholesaler engagement as well as client engagement with funds.
Research Into Treasury ETFs Soars
Advisors are using the VettaFi platform to research fixed income solutions at greater rates in Q1 and now, Hendrickson revealed. It’s unsurprising given the macro environment, with strong research in Treasury ETFs in particular.
It’s sustained interest in “everything in and around the content, the tools, the tickers within the Treasury ETF ecosystem,” Hendrickson said. Specifically, it’s a 38% gain in Treasury ETF research in Q1 over Q4 2022.
Interest in Treasury ETFs continues to rise in the second quarter as advisors weigh risk, duration, and the yield curve.
“There’s a broader theme here as well: the multi-year explosion in exposures that the ETF wrapper is able to provide to the world of fixed income,” Hendrickson said.
The biggest winners year-to-date within Treasury ETFs have been those focused on ultra-short duration of one year or less. It’s a trend that Tarazi tracks via daily flows on the LOGICLY platform. He revealed that YTD ultra-short Treasury ETFs brought in $10 billion in flows so far.
Crypto and the Desire for Diversification
Leah Wald, CEO of Valkyrie, was on next to talk the current state of the crypto economy and regulations. Valkyrie offers the actively managed Valkyrie Bitcoin Miners ETF (WGMI) which Geraci notes is the top performing unleveraged ETF this year. The fund is up 130% YTD. They also offer the Valkyrie Bitcoin Strategy ETF (BTF) and filed for an ether futures ETF on Friday.
“We’ve been hearing from investors for a long time that they’re looking to diversify in the digital asset ecosystem,” Wald explained. This desired diversification is via ETFs as well by asset types, such as an ether futures product.
Bitcoin and ethereum both are tokens of their respective blockchain networks but have vastly different uses. Bitcoin’s basic utility is money according to Wald, whereas ethereum is viewed more as a “world computer.”
It’s enough difference that Wald hopes will prompt regulators to classify ether differently than bitcoin and pave the way for ETFs.
Discussion turned to the Grayscale lawsuit, where Wald believes “the major hurdle for approval actually lies with the crypto exchanges.” SEC Chair Gary Gensler has made clear that until a crypto exchange registers with the SEC, a spot bitcoin ETF won’t be approved.
The two went on to talk about bitcoin sentiment, crypto street cred, and the direction of Valkyrie looking ahead.