As a seasoned analyst with over two decades of experience in the financial industry, I’ve seen countless regulatory battles and market shifts. The upcoming US presidential election could indeed prove to be a game-changer for the long-awaited cryptocurrency exchange-traded funds (ETFs).

The upcoming U.S. presidential election on November 5th has potential implications for over a dozen proposed cryptocurrency Exchange-Traded Funds (ETFs), as their approval by regulatory bodies could hinge upon the elected leader’s stance.

2024 saw a surge of regulatory applications by asset managers aiming to launch ETFs containing various altcoins such as Solana, Ripple’s XRP, Litecoin, and several others.

Investors are similarly eagerly awaiting the green light for numerous proposed cryptocurrency index ETFs, which aim to own a variety of digital tokens.

Essentially, these submissions function as bets or wagers for a Trump victory in the U.S. Presidential election, according to Eric Balchunas, an analyst at Bloomberg Intelligence, stated on October 25th.

These crypto ETFs are 'call options' on the US elections

The election pits Republican nominee Donald Trump — who has said he wants to make America “the crypto capital of the world” — against Democrat Kamala Harris, who has been comparatively quiet on the industry.

Under the leadership of President Joe Biden, Vice President Kamala Harris’s supervisor, the United States Securities and Exchange Commission (SEC) has adopted a firm regulatory approach towards cryptocurrency. This tough stance has resulted in over 100 regulatory actions being taken against crypto-related businesses.

During the Plan B Forum conference in Lugano, Switzerland, Balchunas stated that if Trump wins, keep an eye on this space, but if Harris wins, he suggests letting it go for a while.

Here’s what to expect from crypto ETF issuers if Trump wins on Nov. 5.

These crypto ETFs are 'call options' on the US elections

Altcoin ETFs

In June, fund issuers VanEck and 21Shares each filed an S-1 to register SOL ETFs with the SEC.

On Oct. 30, crypto asset manager Canary Capital followed suit, filing for a SOL ETF of its own.

In January and July, the Securities and Exchange Commission gave approval for Bitcoin (BTC) and Ether (ETH) exchange-traded funds (ETFs) to start trading publicly.

As an analyst, I’d rephrase it as: “According to Ophelia Snyder, co-founder and president of 21.co, the approval of Ethereum ETF might not trigger a significant surge in approvals for other cryptocurrency ETFs. 21.co is the parent company of crypto ETF issuer 21Shares.

In simpler terms, the Securities and Exchange Commission (SEC) has consistently classified Solana (SOL) as a security rather than Bitcoin (BTC) or Ethereum (ETH). However, despite this classification, Matthew Sigel, who leads VanEck’s digital assets research, stated in August that plans for a Solana ETF listing are still being considered.

According to Sigel, VanEck considers Solana (SOL) as a type of commodity, similar to Bitcoin (BTC) and Ethereum (ETH). They continue to support this viewpoint and plan to communicate it to the relevant regulatory bodies.

During the months of October and November, I’ve been involved in the process where Canary Capital, Bitwise, and 21Shares each submitted proposals for potential XRP Exchange-Traded Funds (ETFs). Additionally, Canary Capital has also initiated registration for a Litecoin (LTC) spot ETF.

These crypto ETFs are 'call options' on the US elections

Crypto Index ETFs

Back on October 29th, I found myself eagerly anticipating the potential listing of shares for the Grayscale Digital Large Cap Fund (GDLC) by the New York Stock Exchange Arca. If granted, this approval would mark a significant milestone in the crypto investment landscape, as it could potentially make it easier for individual investors like me to gain exposure to a basket of leading digital currencies through a traditional exchange-traded fund. I’m keeping my fingers crossed and closely monitoring developments on this exciting front!

Grayscale stated that the suggested rule modification, should it be approved, would mark a historic moment as it would allow for the first time the listing and trading of multi-crypto asset ETFs on a national securities exchange.

The fund holds a crypto index portfolio comprising BTC, ETH, SOL, XRP and Avalanche (AVAX).

Grayscale faces competition from other proposed index funds, including those from asset managers Hashdex and Franklin Templeton, but GDLC is unique in including altcoins such as SOL, AVAX and XRP.

Crypto index ETFs are currently limited to BTC and ETH because those are the only digital assets the SEC has authorized to be included in ETFs so far, Katalin Tischhauser, head of investment research at crypto bank Sygnum, told CryptoMoon in August.

“The next logical step is index ETFs because indices are efficient for investors — just like how people buy the S&P 500 in an ETF. This will be the same in crypto,” Tischhauser said.

2024-11-05 01:15

These crypto ETFs are ‘call options’ on the US elections

Altcoin ETFs

Crypto Index ETFs

Grayscale faces competition from other proposed index funds, including those from asset managers Hashdex and Franklin Templeton, but GDLC is unique in including altcoins such as SOL, AVAX and XRP.

Crypto index ETFs are currently limited to BTC and ETH because those are the only digital assets the SEC has authorized to be included in ETFs so far, Katalin Tischhauser, head of investment research at crypto bank Sygnum, told CryptoMoon in August.

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