Crypto Craze: Unconventional ETFs Emerge in Trump Era
The cryptocurrency landscape is witnessing unprecedented developments, with issuers pushing the boundaries of innovation. In a surprising move, Rex Shares and Osprey Funds have filed for a range of crypto-focused exchange-traded funds (ETFs), including one that tracks the price of TRUMP, a memecoin launched by the President himself.
A Novel Structure for Digital Assets
This bold move is seen as a test of the new SEC administration’s resolve. James Seyffart, an ETF analyst at Bloomberg Intelligence, notes that issuers are attempting to provide exposure to digital assets in an ETF wrapper, a novel structure that raises eyebrows.
The Rise of Memecoins
TRUMP, the memecoin, has garnered significant attention, amassing nearly $17 billion in trading volume over the past 24 hours, despite a 25% drop in value. First Lady Melania Trump has also launched her own token, MELANIA, currently trading at around $4. These tokens, lacking intrinsic value, rely on speculation, with traders betting on price fluctuations.
A Departure from Tradition
The SEC, under former Chair Gary Gensler, was cautious in approving ETFs tracking cryptocurrencies. It took years for issuers to receive approval for spot bitcoin and ethereum ETFs. The latest applications, including ETFs tracking Dogecoin, BONK, XRP, and SOL, may face a different fate.
Expert Insights
Bloomberg Intelligence Senior ETF Analyst Eric Balchunas describes the Trump ETF application as “surreal.” As the crypto landscape continues to evolve, one thing is clear: issuers are willing to take risks and push the boundaries of innovation.
A New Era for Crypto ETFs?
With the launch of these unconventional ETFs, the crypto community is left wondering what’s next. Will these novel structures gain traction, or will they face regulatory hurdles? One thing is certain – the crypto craze is here to stay, and issuers are eager to capitalize on its momentum.
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