The US presidential election on November 5 could decide the fate of more than half a dozen cryptocurrency exchange-traded fund (ETF) proposals awaiting approval from regulators.
In 2024, asset managers have filed numerous regulatory filings to list ETFs that hold altcoins, including Solana (SOL), XRP (XRP), and Litecoin (LTC).
Issuers are also awaiting approval for several cryptocurrency index ETFs designed to hold a diverse basket of tokens.
In reality, these filings are “a call option on a Trump victory” in the U.S. presidential election, Eric Balchunas, ETF analyst at Bloomberg Intelligence, said on October 25.
Three out of four cryptocurrency owners say a candidate’s cryptocurrency policies will affect how they vote. Source: Gemini
In this election, Republican candidate Donald Trump, who has said he wants to make the United States the “crypto capital of the world,” will face off against Democrat Kamala Harris, who is relatively quiet in the industry.
Under Vice President Harris’s boss, President Joe Biden, the U.S. Securities and Exchange Commission (SEC) has taken an aggressive regulatory stance on cryptocurrencies, taking more than 100 regulatory actions against companies in the industry.
“If you see Trump winning, watch this space, and if you see Harris winning, forget about it for a few years,” Balchunas said at the Plan B Forum conference in Lugano, Switzerland.
If Trump wins on November 5, here’s what to expect from cryptocurrency ETF issuers.
BTC and ETH are significantly ahead in terms of market capitalization. Source: CoinGecko
Altcoin ETF
Last June, fund issuers VanEck and 21Shares each filed an S-1 to register the SOL ETF with the SEC.
On October 30, cryptocurrency asset manager Canary Capital followed suit and applied for its own SOL ETF.
The SEC approved the listing of spot Bitcoin (BTC) and Ethereum (ETH) ETFs in January and July, respectively.
Nonetheless, Ophelia Snyder, co-founder and president of 21.co, told Cointelegraph in June that “ETH approval is unlikely to lead to a significant increase in approvals for other types of cryptocurrency ETFs.” 21.co is the owner of 21Shares, a cryptocurrency ETF issuer.
The SEC has repeatedly maintained that SOL, unlike BTC and ETH, is a security, but plans to list a SOL 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 are committed to defending this position (…) to the appropriate regulators.”
Meanwhile, Canary Capital, Bitwise, and 21Shares each filed XRP ETF offerings in October and November. Canary Capital has also applied for registration of a spot LTC ETF.
GDLC’s holdings. Source: Grayscale.
Cryptocurrency Index ETF
On October 29, the stock exchange NYSE Arca requested permission from the SEC to list GDLC (Grayscale Digital Large Cap Fund) stock.
“If adopted, his proposed rule changes would be the first domestic stock exchange rule set to allow stock listing and trading of multiple crypto assets (ETFs),” Grayscale said.
The fund holds a cryptocurrency index portfolio consisting of BTC, ETH, SOL, XRP, and Avalanche (AVAX).
“The next logical step is index ETFs. Because indices are just as efficient for investors as people buying the S&P 500 in an ETF. This will also be true for cryptocurrencies,” Tischhauser said.
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