Crypto ETFs: The Financial World’s Midlife Crisis

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Ah, ETFs. The financial world’s equivalent of a Swiss Army knife-handy, versatile, and somehow always in your uncle’s pocket at family gatherings. They’ve been hailed as one of modern finance’s greatest innovations, turning investing from a high-stakes game of Monopoly into something your grandmother could do while knitting. Diversified investing? Liquid? Accessible? ETFs made it all possible. But here’s the kicker: they were built for a world where markets closed at 4 PM and settlements took longer than a British queue for tea. In other words, they’re about as suited for the onchain world as a typewriter is for writing a novel in 2023.

  • Crypto ETFs? More like legacy wrappers for digital-native assets. They strip ownership rights, block onchain utility, limit trading hours, and charge fees that would make a highway robber blush. All you get is price exposure-the financial equivalent of watching a movie through a keyhole.
  • Direct ownership, on the other hand, is like owning the cinema. Onchain portfolios let you customize weights, optimize taxes, participate in governance, and rebalance 24/7. It’s investing on Red Bull.
  • The future? Onchain direct indexing. Smart contracts replace middlemen, preserve asset utility, and deliver diversified investing without sacrificing control. It’s like upgrading from a horse-drawn carriage to a Tesla-and the horse doesn’t even notice.

Here’s the problem: ETFs are the financial equivalent of a flip phone in a smartphone world. They were designed for markets that close daily, settlements that take days, and a system where middlemen are as essential as oxygen. Add high fees and static composition, and you’ve got a recipe for obsolescence. We’re in an era where assets do more than just sit there-they stake, govern, airdrop, and lend. Transactions are executed by code, not people. Wealth grows onchain. So why are we wrapping next-gen assets in last century’s designs? It’s like putting a jet engine on a horse and calling it progress.

Giving Up More Than Your Lunch Money

When you buy an ETF, you’re essentially renting a timeshare in someone else’s vacation home. The ETF issuer holds the actual assets, stripping you of ownership rights faster than a pickpocket at a crowded festival. The Big Three-BlackRock, Vanguard, and State Street-control nearly 60% of global ETFs, wielding voting power like they’re running for prom king. Most ETF investors have about as much say in governance as a goldfish has in choosing its bowl.

In crypto, this is even more absurd. Assets come with staking rewards, governance rights, airdrops, and lending opportunities-but only if you hold them directly. Crypto ETFs track the price like a stalker but don’t pass on any of the onchain benefits. It’s like buying a car and only getting the keys to the glove compartment.

And let’s not forget trading hours. Spot crypto markets run 24/7, but ETF investors are stuck in the 9-to-5 grind. Missed overnight volatility? Tough luck. Asset inclusion? Pre-packaged options with no room for personalization. It’s the financial equivalent of being forced to eat a pre-made sandwich when you’re gluten-free and vegan.

Fees? Oh, the fees. Grayscale’s Bitcoin ETF charges 150 basis points-15 times the fee of SPY, the S&P 500 ETF. Retail investors are paying through the nose for limited exposure when they could just buy Bitcoin directly on Coinbase without custody costs. It’s like paying for bottled water when the tap is right there.

Closing the Personalization Gap (Without a Sewing Kit)

High-net-worth investors avoid ETFs like a plague. They direct index, buying underlying stocks to get voting rights and tax optimization. But onchain personalization takes this to the next level. Customizable weights, exclusion lists, dynamic reallocation-it’s like building a Lego castle instead of settling for a pre-made model. And with onchain assets, you can lend and earn yield at the asset level. It’s financial freedom, not financial captivity.

The infrastructure? Already here. Blockchains like Base or Solana make continuous, automated management practical with near-zero fees. Smart contracts are the new middle managers, working 24/7 without complaining about their coffee break. And the UX? Sleek, seamless, and hiding all the complexity under the hood. It’s like magic, but with more spreadsheets.

Accessibility: The Trojan Horse of Compromise

Crypto ETF evangelists claim they make crypto more accessible. Sure, it’s familiar and regulated, but at what cost? Accessibility shouldn’t mean giving up ownership, control, or utility. The next generation of crypto apps needs to offer the familiarity of traditional brokerage accounts with the benefits of direct ownership. It’s like having your cake and eating it too-without the guilt.

Tokenized ETFs? They’re just wrappers in disguise. Trading is bound by the liquidity of the wrapper, not the underlying assets. It’s like trying to sell a house by only showing the mailbox. The point of crypto is direct ownership, not more middlemen. The wrapper model is as outdated as a fax machine.

Crypto’s New Destination: No Wrappers Allowed

The ETF market is projected to hit $30 trillion by 2030. But here’s a radical idea: what if we ditch the wrappers altogether? The future is direct ownership, automated portfolios, and seamless cross-chain execution. ETFs were brilliant for their time, but we’re not in the 1990s anymore. It’s time to build new tools for a new era. The infrastructure exists-we just need the courage to use it.

Brian Huang

Brian Huang is the cofounder and CEO of Glider. He’s a recognized figure in the world of high-frequency trading, having worked at the world-class trading firm XTX Markets, focusing on low-latency machine learning based strategies. After XTX, he led the product development of Anchorage Digital’s trading systems, which are used by some of the largest institutions in the world. Brian first touched crypto in 2015 as part of the infamous Bitcoin Project at MIT, where he also graduated with dual degrees in Computer Science and Management.

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2026-01-31 17:36