New SEC Filing Proposes Official Trump Token ETF Amid Rapid Crypto Market Growth
A new prospectus submitted to the U.S. Securities and Exchange Commission (SEC) aims to bring a fresh wave of crypto-focused exchange-traded funds (ETFs), including one based on the recently launched meme token, Official Trump (TRUMP).
The filing also includes proposals for ETFs centered around established cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Solana (SOL), alongside meme tokens such as Dogecoin (DOGE) and BONK.
The TRUMP ETF stands out as it seeks exposure to a token that debuted only days prior. It is proposed to operate through a Cayman Islands subsidiary, REX-OspreyTM TRUMP (Cayman), and intends to leverage a faster SEC approval process under the Investment Company Act of 1940, potentially allowing for a launch within 75 days. However, this expedited filing process has sparked skepticism due to its high risk and reliance on derivatives rather than holding the underlying token.
Unlike traditional spot market ETFs, the TRUMP ETF will focus on derivative contracts tied to the token’s price performance. At most, 25% of the fund’s exposure will involve TRUMP tokens, while the remainder will consist of U.S. Treasuries, government debt, money market funds, and similar assets to mitigate risk. This strategy acknowledges the challenges of limited liquidity and counterparties in the TRUMP derivative market, with Hyperliquid being one of the few platforms currently offering TRUMP derivatives.
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The filing follows a recent trend of crypto ETF applications, including ProShares’ proposal for XRP-based products and VanEck’s Onchain Economy ETF. Unlike these, the TRUMP ETF filing aims to accelerate approval and capitalize on the token’s momentum.
TRUMP’s market performance has been volatile but resilient. After an initial 50% dip to $31 due to profit-taking by early investors, the token rebounded to $42.25, fueled by significant trading activity exceeding $13 billion. The token’s rapid rise from decentralized launch to centralized trading and potential ETF inclusion highlights its unexpected liquidity and popularity.
As the SEC reviews this proposal, the TRUMP ETF underscores a broader movement to bring meme tokens and niche crypto assets into the mainstream financial ecosystem, despite concerns about market risks and regulatory challenges.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
