Trump memecoin frenzy spawns ETF bid in test of SEC boundaries
FIRST the Trump memecoin, now the exchange-traded fund (ETF).
Just days after Donald Trump sparked a speculative and controversial crypto frenzy – by launching namesake digital tokens in the run-up to his presidential inauguration – an upstart ETF firm is pitching an ETF that will go all-in on the branded Trump coin.
On Tuesday (Jan 21), REX Financial and Osprey Funds filed with the US Securities and Exchange Commission (SEC) for a product trading the memecoin. Bearing the “TRUMP” ticker, it was unveiled on Friday to industry fanfare, while raising big questions around conflicts of interest for the president and his family, who stand to benefit from its trading.
The filing also states REX-Osprey’s intent to launch a slew of other crypto-centric funds, focused on everything from Bitcoin and Ether, to smaller tokens such as Dogecoin and Bonk.
It’s the latest gambit from Wall Street issuers, who are betting America’s “first crypto president” will kick-start a new permissive regulatory era for the digital-asset community.
“Issuers are looking to push the envelope with this new SEC administration and see how far they can go,” said Bloomberg Intelligence ETF analyst James Seyffart. “Like we have seen with single-stock ETFs and other newer products in recent years, if ETF issuers are given an inch or a small hole, they will probably try to take a mile.”
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The launch of the Trump token rattled the crypto market last week after it attracted billions of US dollars of trading volume in a short span of time. The president touted it on his social media accounts, drawing questions around conflicts of interest. The market value for the Trump token then dwindled on Sunday after his wife Melania Trump also debuted her own coin.
A crowd of issuers are prepping for a shift in the regulatory pendulum by filing for ETFs based on Solana, XRP and other crypto tokens. On Friday, ProShares registered paperwork for a Solana ETF, and CoinShares said it was looking to debut a Digital Asset ETF. Overall, there are more than 30 new filings for digital-asset-based ETFs, according to a tally from Bloomberg Intelligence.
Still, some ETF experts urge caution. A more crypto-friendly administration does not mean that the floodgates will be opened for all manner of digital-asset-based funds just yet, said Bloomberg Intelligence’s Seyffart.
“These are the first filings we have seen for memecoin ETFs in the US. The TRUMP ETF would hold an asset that was only created a few days ago, while BONK and DOGE are two of the most popular memecoin assets in the world before this weekend,” he said. “I’m not sure that even a libertarian-minded and Republican-controlled SEC will want to approve these products. But time will tell.” BLOOMBERG
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