- Web3 leaders have expressed their skepticism about having an NFT ETF this year
- The leaders attributed the impossibility to the “illiquidity of NFTs.”
- They also compared NFT ETFs to real estate ETFs
Web3 and crypto industry leaders are skeptical that an NFT ETF would be available to investors this year due to, in part, the “illiquidity of NFTs.” The possibility of an EFT tracking the price of NFTs was first suggested by Pudgy Penguins CEO Luca Netz but other leaders in the space said such an ETF is “unlikely to happen.” The leaders compared it to a real estate ETF which they said is rare due to challenges in “discovery and market-making,” indicating that an NFT ETF may struggle to attract investors if it launches soon.
Pudgy Penguins CEO to Launch an NFT ETF?
Netz said he was working on something for our JPEGs” and accompanied the post with a collage of top NFTs. This attracted speculations that the Pudgy Penguins executive wants to launch an NFT ETF.
NFT ETF https://t.co/49jgHFwvWS
— alex – Ñ (@europoored) March 2, 2025
Top names in the ecosystem joined the discussion outlining why such an ETF is “unlikely to happen” in 2025 and probably next year. CoinShares’ James Butterfill, for example, said an ETF focusing on collectibles would face structural and technical hardships that would hinder its adoption.
Bitwise’ Ryan Rasmussen noted that the technical challenges would touch on how to harmonize NFT prices. He added that the illiquidity of NFTs makes it nearly impossible to safely open and close a position.
NFT ETF Supporters Stuck in 2021
Rasmussen believes that those suggesting an NFT ETF are stuck in the NFT boom of 2021, adding that investors aren’t really looking to get into NFTs through ETFs. Magic Eden’s Chris Akhavam said that the viability of an NFT ETF will be determined by a major growth cycle in the sector.
Akhavam, however, noted that the discussions around such an ETF will likely increase the demand for NFTs and consequently make them more liquid.
Although most industry leaders are skeptical about an NFT ETF, the discussions around the topic may lead to conversations about making collectibles liquid.
