Canary Capital has filed for an ETF that will invest in the token launched by Donald Trump. This event has captured the attention of investors and analysts due to potential regulatory hurdles.
Overview of the ETF Filing
Canary Capital is the first company to file for an ETF that will directly invest in the Official Trump token. This token was launched in January, just days before Trump's re-entry to the presidency. Currently, it ranks 55th by market capitalization and has fallen 69% from its all-time high of $46.50.
Analyst Doubts
Bloomberg ETF analyst Eric Balchunas expressed doubt about whether the ETF can pass regulatory scrutiny. He noted that to gain approval, the ETF must be based on a futures product traded on an exchange for at least six months, which he believes does not currently exist. He added that there is a possibility of using a 40 Act approach for ETF registration.
Cryptocurrency Market and Investment Risks
Canary Capital's filings indicate that the ETF may be too risky an investment for some investors. The described strategy as a 'regulatory end-around' has faced criticism. Greg King, CEO of REX Financial, warned ETF issuers to be cautious when selecting cryptocurrencies for their funds, as many might be 'pretty sketchy.'
Canary Capital's application for a Trump token ETF attracts the attention of both investors and analysts. Doubts regarding regulatory compliance and conceptual risks highlight the complexities of creating an investment product based on cryptocurrencies.
