Just days after President took office, two asset management firms jointly applied for regulatory approval to launch an exchange-traded fund connected to the digital currency or "meme coin," as per a Tuesday filing.
REX Advisers, the parent company of ETF issuer REXShares, and Osprey Funds submitted documents to the U.S. Securities and Exchange Commission for the introduction of seven new cryptocurrency ETFs associated with the $TRUMP coin released on Friday, other meme coins such as DOGE and BONK, and established tokens like Solana and Ripple's XRP.
These applications will gauge the extent to which the SEC's new crypto-friendly leadership, which was announced on Tuesday, is willing to introduce new crypto products.
This is the wild west now, a domain where there is potential to launch many esoteric products and people are eager to explore what will succeed because it's such a rapidly growing sector, explained Todd Sohn, ETF strategist at Strategas.
But I'm uncertain how many of these will gain approval; some seem quite extravagant.
The filings outline some of the risks associated with designing, let alone investing in, emerging crypto tokens like $TRUMP.
TRUMP is a relatively new concept and is exposed to specific and substantial risks," stated REXShares and Osprey Funds. "The TRUMP market is prone to sudden price fluctuations, alterations, and uncertainty.
The price of $TRUMP has fluctuated significantly, ranging from about $10 to a high of $74.59 on the same day, dropping to $31.65 on Monday night and hitting $44 late on Tuesday afternoon, according to the cryptocurrency price monitor CoinGecko. This gives the meme coin a notional value of $8.9 billion.
Neither REX nor Osprey could be reached for immediate comment. The Trump administration's office did not respond immediately to a comment request.
On Friday, ProShares, another asset manager, also filed for eight new ETFs, four linked to Solana and four to XRP. Currently, regulators have not approved ETFs associated with those coins. Furthermore, ProShares aims to secure approval to launch leveraged and inverse ETFs.
ProShares declined to comment. The most recent group of crypto ETF applications will add to the existing two dozen others pending with the SEC.