The US presidential election on November 5 could decide the fate of more than a half-dozen proposed cryptocurrency funds (ETFs) awaiting the green featherlight from regulators.
In 2024, asset managers filed a slew of regulatory filings to list ETFs holding altcoins, including Solana (SOL), XRP (XRP), and Litecoin (LTC), among others.
Issuers are also waiting for approval of several planned cryptocurrency index ETFs designed to hold a variety of baskets of tokens.
In effect, these filings constitute “call options if Trump wins” the US presidential race, Eric Balchunas, an ETF analyst at Bloomberg Intelligence, said on October 25.
Three out of four cryptocurrency owners said a candidate’s crypto policies would influence how they vote. source: Gemini
In the election, Republican candidate Donald Trump – who has said he wants to make America the “crypto capital of the world” – is facing off against Democrat Kamala Harris, who has been relatively silent in the field.
Under President Joe Biden – Vice President Harris’ boss – the US Securities and Exchange Commission (SEC) has taken an aggressive regulatory stance against cryptocurrencies, initiating over 100 regulatory actions against industry firms.
“If you see Trump win, watch this space, and if you see Harris win, just forget about it for a few years,” Balchunas said at the Plan B Forum conference in Lugano, Switzerland.
Here’s what to expect from cryptocurrency ETF issuers if Trump wins on November 5.
BTC and ETH lead in terms of market capitalization. Source: CoinGecko
Altcoin ETFs
In June, fund issuers VanEck and 21Shares filed an S-1 filing to register the SOL ETFs with the SEC.
On October 30, crypto asset manager Canary Capital followed suit by filing to launch its own SOL ETF.
The SEC has given the green featherlight for Bitcoin (BTC) and Ether (ETH) ETFs to list in January and July, respectively.
Still, “the approval of ETH is unlikely to result in a large wave of approvals” for other types of crypto ETFs, Ophelia Snyder, co-founder and CEO of 21.co, told Cointelegraph in June. 21.co owns the cryptocurrency ETF issuer 21Shares.
The SEC has repeatedly asserted that SOL – unlike BTC and ETH – is a security, but plans to list SOL in an ETF are “still in the works,” Matthew Sigel, head of digital asset research at VanEck, said in August.
“VanEck believes that SOL is a commodity, just like BTC and ETH,” Sigel said. “We will continue to advocate for this position […] relevant regulatory authorities.”
Meanwhile, in October and November, Canary Capital, Bitwise and 21Shares filed for proposed XRP ETFs. Canary Capital has also filed an application to register an LTC spot ETF.
GDLC shares. source: Grayscale.
Crypto index ETFs
On October 29, NYSE Arca asked the SEC for approval to list Grayscale Digital Enormous Cap Fund (GLDC) shares.
“[T]proposed rule change, if adopted, would constitute the first national set of stock exchange rules to allow the listing and trading of shares of multi-crypto assets [ETFs]”, Grayscale he said.
The fund has a portfolio of cryptocurrency indexes including BTC, ETH, SOL, XRP and Avalanche (AVAX).
“The next logical step is index ETFs because indexes are efficient for investors – just like people buy the S&P 500 in an ETF. It will be the same with cryptocurrencies,” Tischhauser said.
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