Eric Balchunas calls ETFs 'tokens with benefits', stirring debate

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Yaroslav Dmytrenko

24.09.2025

Eric Balchunas calls ETFs 'tokens with benefits', stirring debate — Bloomberg analyst sparks debate on ETFs versus crypto tokens

The crypto community is actively discussing the theory of “ETFs over tokens,” introduced by Bloomberg Senior ETF Analyst Eric Balchunas.

Against the backdrop of a second consecutive day of outflows from crypto ETFs, analysts and experts engaged in a lively debate on X about the pros and cons of crypto tokens versus ETFs.

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Balchunas called ETFs “tokens with benefits,” noting they offer everything tokens do — instant access, minimal costs, flexibility, and yield (you can even lend them easily). But ETFs also come with additional advantages tokens lack: regulatory protection, anonymity, and broad accessibility.

“Another month, another record for ETFs (‘tokens with benefits’)… their count is likely nearing 1,000 or four launches per day. It’s dizzying,” Balchunas wrote, referencing 74 ETFs launched in just a month — 55% more than the year prior.

James Meidinger, head of business development at stablecoin USDM, responded by pointing out that Cardano has many “tokens with benefits” already (NMKR, Strike Cardano, Snek, Surf, Hoskytoken, FluidTokens, USDM, and Danogo Finance). He also reminded followers of the coming altcoin season.

Other commentators stressed the philosophical difference between ETFs and tokens.

“A token is unrestricted code; an ETF is custodial compliance. One is math as law, the other law wrapped around math. The question is simple: do you want assets bound by physics, or by regulators?” wrote author Shanaka Anslem Perera.

Full freedom or regulatory shelter?

Critics argued that ETFs can never match token flexibility, as they cannot trade 24/7 or function on peer-to-peer exchanges without censorship.Balchunas countered that “in many cases, ETFs can be traded around the clock… many exchanges are moving toward longer trading hours,” while reminding that 99% of investors don’t need nonstop access.

Supporters of tokens also continued to defend Bitcoin’s decentralization and questioned the actual protection regulators provide, noting they cannot prevent economic crises.

The debate over ETFs vs tokens coincided with continued ETF outflows. On Tuesday, funds lost more than $400 million, followed by another $140 million from Bitcoin ETFs and $91 million from Ethereum ETFs on Wednesday. Fidelity’s ETFs saw the biggest withdrawals — 676 BTC and 15,222 ETH.Despite this, Balchunas remains optimistic about ETF market prospects in the coming months.

As we wrote, Eric Balchunas advocates index funds for average investors

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