SEC finally recognizes the potential of ETFs: the Trump initiative and other challenges...

SEC finally recognizes the potential of ETFs: the Trump initiative and other challenges on the horizon

The US securities regulator (SEC) is slowly opening up to the world of cryptocurrencies as it has officially begun the process of approving the first combined Bitcoin and Ethereum ETF. This move marks an important milestone that could significantly impact the future of the crypto market in the US.

The new proposal comes from Trump Media, which has applied to the SEC for approval of an exchange-traded fund that would give investors exposure to key cryptocurrencies through NYSE-listed Arca shares. The fund is to be composed of 75% Bitcoin and 25% Ether, with asset values backed by these digital currencies. The fund is managed by Crypto.com (formerly Foris DAX Trust Company) and sponsored by Yorkville America Digital.

The move comes at a time when the SEC is closely examining simplified crypto ETF structures and seeking to streamline the approval process through automation and simplification of rules. Trump Media's filing is thus part of a broader trend of growing interest in cryptocurrency exchange-traded products.

Unique to the proposal is that the fund will assess its net asset value daily based on the CME CF Bitcoin and CME CF Ether benchmark rates, which aggregate data from the major crypto exchanges. In addition, the fund manager keeps the security of digital assets separate from other customer funds and keeps private keys in cold storage, which strengthens security measures.

The first Form S-1 filing with the SEC took place on June 16, marking the first official attempt to launch a dual Bitcoin and Ethereum ETF in the US.

While the SEC is slowly moving towards accepting cryptocurrency funds, other cryptocurrency ETF applications are still pending. For example, Fidelity submitted a proposal for a Solana spot ETF (SOL) earlier this year, but the SEC has so far delayed a decision. A decision on that application has been postponed and the Cboe BZX exchange has requested a new filing in order to get permission to list the fund.

However, analyst James Seyffart of Bloomberg ETF sees these postponements as a positive sign. He notes that the SEC is asking issuers to amend and resubmit their applications, suggesting that the regulator is actively engaged in creating a clearer framework for crypto ETFs. He says any such resubmission is a signal that the SEC is willing to take up the matter, even if it has not yet made a significant step toward approval.

Overall, the SEC is on its way to greater recognition of cryptocurrencies as investment assets. While the decision to approve Bitcoin and Ethereum ETFs is still open, the regulator's activity and the interest of major players suggest that the path to official crypto funds in the US is already underway. This could bring a wider range of investors access to digital assets and strengthen their position in the financial market.

Stay tuned - the future of cryptocurrency ETFs in the US is still in flux, but the first steps have already been taken.

*This is not an investment recommendation.

Coingarage team