The Hidden Risk Behind ETF Growth | Eric Balchunas and Dave Nadig Debate If We've Gone Too Far

ETF innovation or madness?

In this episode of Rabbithole, Dave Nadig is joined by Bloomberg’s Eric Balchunas for a candid and wide-ranging conversation on the explosion of new ETFs—some useful, some ridiculous, and some outright dangerous. They debate where the line should be drawn between investor freedom and regulatory responsibility, why the current ETF boom feels different, and whether the rise of private markets and derivatives in ETFs is creating cracks in the financial system. From yield-maxing “hot sauce” products to private equity in public wrappers, this is a no-holds-barred look at where the ETF industry is heading.

🔍 Topics Discussed:

Why not all ETF buyers are your mom—and why that matters

The ETF rating philosophy: truth in labeling over moral judgment

ESG ETFs and the dangers of overpromising

The rise of “YieldMax” style products and their behavioral appeal

Are leveraged and options-based ETFs pushing the ecosystem too far?

ETF structure vs. mutual funds during liquidity crises

When ETFs outgrow their underlying markets (and what that breaks)

The problem with private equity ETFs and mark-to-myth pricing

Buffers, derivatives, and the new face of retail-friendly structured products

Eric’s crypto ETF thoughts, hopes for a uranium spot ETF, and more