Originally published on: November 04, 2024
The upcoming United States presidential election on Nov. 5 is not just about political implications, but it may also have a significant impact on the fate of various proposed cryptocurrency exchange-traded funds (ETFs) awaiting approval from regulators.
In recent years, numerous asset managers have submitted regulatory filings to introduce ETFs holding alternative cryptocurrencies like Solana, XRP, and Litecoin, among others. Additionally, plans for crypto index ETFs, designed to hold diverse baskets of tokens, are also in the works.
These filings are being seen as “call options on a Trump victory” in the US presidential race, according to Eric Balchunas, an ETF analyst at Bloomberg Intelligence. With three in four crypto owners considering a candidate’s crypto policy in their voting decisions, the outcome of the election could have far-reaching consequences for the crypto industry.
The election presents a significant contrast between Republican nominee Donald Trump, who aims to position America as the “crypto capital of the world,” and Democrat Kamala Harris, who has been relatively silent on the crypto industry.
Under President Joe Biden’s administration, the US Securities and Exchange Commission (SEC) has taken a strict regulatory stance on crypto, initiating numerous regulatory actions against industry companies. Balchunas suggested that a Trump victory could pave the way for significant advancements in the crypto space, while a Harris victory may result in a regulatory halt for a period of time.
As we approach the election date, let’s take a closer look at what to expect from crypto ETF issuers in case of a Trump victory.
Market data indicates that BTC and ETH lead heavily in terms of market capitalization, setting the stage for potential ETF developments in these areas.
Fund issuers like VanEck, 21Shares, and Canary Capital have already filed for Solana ETFs with the SEC, anticipating positive outcomes if Trump secures a victory. While the SEC’s stance on Solana as a security remains a point of contention, these issuers remain committed to their positions and advocate for regulatory approval.
In a similar vein, filings for proposed XRP and Litecoin ETFs have been submitted by Canary Capital, Bitwise, and 21Shares, showcasing a proactive approach towards potential ETF offerings in the event of a favorable election outcome.
Furthermore, NYSE Arca has sought approval to list shares of Grayscale Digital Large Cap Fund (GLDC), the first national securities exchange ruleset permitting the listing and trading of shares of multi-crypto asset ETFs. The fund’s portfolio includes BTC, ETH, Solana, XRP, and Avalanche, presenting a diversified investment opportunity in the crypto market.
As the election draws near, the crypto industry remains poised for potential growth and innovation, with ETF issuers closely monitoring developments and positioning themselves for regulatory approvals.
In conclusion, the upcoming US elections hold the key to unlocking the potential of crypto ETFs, making them more than just investment vehicles but also strategic plays on the future of the industry. Stay tuned for updates on how these ETFs evolve in response to the election results.
