Crypto ETFs are new weapon in ‘marketing war’ for Gen Z investors

Happy Friday!

Ethereum futures exchange-traded funds offer asset managers more than just a revenue line — it’s a way to swoop up the next generation of investors.

But whether it’s a marketing ploy or a testament to the power of crypto, the asset class won’t make up the bulk of traditional finance firms’ bottom line any time soon.

Let’s dive into it.

Down with the kids

Several Ethereum futures funds launched this week. But only two have really caught the eyes of investors.

Despite the disappointing start, asset managers aren’t too concerned, according to analysts.

The reason? Old-school finance firms, which manage billions of dollars of assets, can count digital asset ETFs as a marketing expense to attract the next generation of investors.

One clue: VanEck — whose fund together with ProShares made up for 90% of Ethereum futures ETF trading volume — have timed its push to coincide with a drive to boost its following on X, formerly Twitter.

The firm’s social media team has more than doubled the number of posts it sent out on the platform in the last 30 days.

VanEck’s X followers soared by around 3,600% over the past month, with most of the gains over the past week, according to data analytics firm Social Blade.

“This is why you launch Ether futures ETF even though you know spot ETFs will likely be approved in the not-too-distant future…marketing expense,” said Nate Geraci, president of financial advisor the ETF Store, quoting one of VanEck’s posts.

It also demonstrates that the firm is “forward-thinking around crypto,” he said.

Digital assets are just a small part of VanEck’s operations. The asset manager offers 70 ETFs and mutual funds. It manages nearly $80 billion in assets.

Competition for customers could lead to a “marketing war,” Eric Balchunas, an ETF analyst at Bloomberg Intelligence, said last week.

The practice hasn’t been limited to ETF launches though. Fidelity is another traditional finance firm that uses social media to reach customers from different demographics.

Crypto market movers

• Bitcoin fell 0.5% over the past day to trade above $27,600.
• Ethereum slipped 0.5% to $1,630. The second largest cryptocurrency by market capitalisation is down 2.6% over the last week.

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Adam Morgan McCarthy is DL News’ London-based Markets Correspondent. Got a tip? Reach out at adam@dlnews.com Tom Carreras is a Markets Correspondent at DL News. Got a tip? Reach out at tcarreras@dlnews.com