Compared to the policy windfall, it seems more like betting on how long a politically backed crypto story can sell.
Written by: ChandlerZ, Foresight News
Trump Media & Technology Group recently submitted two S-1 registration statements for cryptocurrency asset ETFs to the U.S. SEC. The group's Truth Social platform is advancing a Bitcoin and Ethereum spot ETF, as well as a composite "Crypto Blue Chip ETF" consisting of five mainstream cryptocurrency assets.
On July 2, Trump Media & Technology Group announced that it had submitted the initial S-1 registration statement for the Truth Social Bitcoin and Ethereum ETF to the U.S. Securities and Exchange Commission. This ETF will directly hold Bitcoin and Ethereum, with 75% of its assets invested in Bitcoin and 25% in Ethereum, and will issue shares to investors. The goal of this ETF is to closely track the spot prices of the two cryptocurrencies, taking the form of an open-ended trust, and is intended to be listed on the NYSE.
Shortly after, on July 8, the group submitted another S-1 document, applying for the "Truth Social Crypto Blue Chip ETF." The assets of the Truth Social Crypto Blue Chip ETF trust mainly include Bitcoin, Ethereum, Solana (SOL), Ripple (XRP), and Cronos (CRO), held by a custodian on behalf of the trust. According to the trust agreement, the initial expected allocation of assets is approximately 70% Bitcoin, 15% Ethereum, 8% SOL, 5% CRO, and 2% XRP.
These two applications are in the early stages of the SEC review process, but the assets involved are all high-market-cap mainstream cryptocurrencies. The market is currently observing whether the SEC will relax its stance on multi-asset crypto ETFs after approving Bitcoin and Ethereum ETFs. The asset distribution proposed by Truth Social is relatively conservative, which may have some adaptability in the current regulatory climate.
SEC is considering establishing a unified listing standard for crypto ETFs
Meanwhile, the U.S. SEC is discussing a universal listing standard for crypto ETFs with major exchanges. According to The Block, exchanges are seeking a clearly recognized listing framework to bypass the lengthy 19b-4 application process. Under the current mechanism, each crypto ETF must submit a case-by-case approval, with the longest approval period reaching 240 days. Exchanges are pushing for a proposal that would allow ETF products meeting standard conditions to be listed for trading directly, without needing to seek SEC votes one by one.
The standard discussions involve quantitative indicators such as market capitalization, liquidity, and network distribution. These discussions are still in the early stages, but some insiders at the SEC believe that the mechanism could begin testing before this fall. This move is seen as a way to simplify the application process, shorten listing times, and increase transparency. Bloomberg analyst James Seyffart stated that once the standards are established, the market will see a wave of concentrated applications for crypto ETF products, with multiple cryptocurrencies, including Solana, XRP, and Dogecoin, likely to be approved in the short term.
Truth Social's timing for submitting its ETF application falls within this transitional phase. The product application description does not emphasize technical highlights or introduce complex derivative mechanisms. Both ETFs adopt a traditional open-ended trust format, similar to the already approved Bitcoin spot ETFs. The difference is that the blue-chip ETF includes more cryptocurrencies, involving weight allocation among the assets. In the absence of a unified review mechanism, it remains unclear whether this fund can be considered a "qualified product."
Motivations behind political statements and market environment
Since the Trump administration took office, the frequency of statements regarding cryptocurrency assets has significantly increased. In March of this year, Trump first stated on Truth Social that "the U.S. cryptocurrency reserve will enhance this key industry, which has been subjected to corrupt attacks by the Biden administration for years. This is why my digital asset executive order instructs the presidential task force to advance a crypto strategic reserve that includes XRP, SOL, and ADA. I will ensure that America becomes the world’s cryptocurrency capital. We are making America great again!"
Subsequently, the executive order signed by Trump revealed that it would include two parts: a strategic reserve and an inventory. The strategic reserve will only contain BTC (the digital asset with the highest value storage), using approximately 200,000 tokens held by the government through criminal and civil forfeiture over the years. The other part is a digital asset reserve that may include assets other than Bitcoin, possibly XRP, ADA, ETH, and SOL, as well as other potential assets. The main difference between the reserve and the inventory is that the government will not actively seek to purchase more inventory assets. The government will only explore using government funds (if they can find a budget-neutral way to do so) to purchase BTC. The Treasury Secretary can determine responsible management strategies, including assets that may be sold from the U.S. digital asset inventory. This has raised external concerns about its policy direction.
In May, Politico reported that Trump's earlier posts on Truth Social supporting the inclusion of XRP, SOL, and ADA in the crypto strategic reserve were actually driven by a lobbyist, Ballard Partners, without Trump's knowledge, and the related lobbyist had been "ousted" from the White House. According to three insiders, minutes after the president's post, the White House's "cryptocurrency czar," David Sacks, became furious and called Wells to complain. After the posts about cryptocurrency were exposed, Ballard was temporarily excluded from the White House, as staff were instructed not to meet with him. However, five individuals close to Trump indicated that dissatisfaction with Ballard went beyond this. Some White House officials believed that Ballard was exploiting Trump's reputation for profit, boasting that his relationship with the president and Wells was not as close as advertised. The White House declined to comment.
Despite the controversy, Trump has reiterated on multiple occasions that the crypto industry is a key area for future growth. According to a June survey by Deutsche Bank, American consumers are the largest user group of cryptocurrencies, primarily consisting of young, wealthy males. In May, the cryptocurrency adoption rate in the U.S. was 17%, higher than 11% in the UK and 10% in the EU. Among the 18-34 age group in the U.S., the adoption rate rose from 24% in January to 29% in June. Analysts pointed out that this is mainly due to market optimism regarding Trump's support for cryptocurrency policies. Among U.S. respondents, wealthy individuals accounted for 32% of cryptocurrency adopters. Additionally, 23% of American males reported using cryptocurrencies for payments or personal investments, compared to 13% for females. Male consumers generally believe they have a deeper understanding of cryptocurrencies than females.
The timing of Truth Social's ETF application is difficult to separate from the political environment. The compliance and business logic of the ETF products still need to be reviewed, but their political symbolic significance is already present. Truth Social, as a platform and product carrier, has room for further commercialization. However, there are also voices in the market that hold reservations about the actual impact of the product. About 30% of the assets in the blue-chip ETF come from tokens other than Bitcoin, which have relatively limited liquidity and market stability. Especially for CRO and XRP, their price volatility and regulatory controversies raise questions about whether they are suitable as underlying assets for publicly traded funds. The SEC has strict requirements for asset safety, custody arrangements, and valuation mechanisms when reviewing spot ETFs.
Investors are also assessing whether these products can maintain long-term attractiveness. Currently, there are over 10 Bitcoin spot ETFs trading in the market, mostly concentrated among asset management giants. Truth Social lacks operational experience in the financial sector, making it a real challenge to establish market share. Additionally, operational factors such as fund fees, liquidity support, and market maker cooperation have not yet been clarified, which may also affect its market performance.
The window period between regulatory advancement and market expansion
When deciding whether to approve these new ETF products, the SEC must respond to political pressures while also addressing market calls for more product types. If the unified standards promoted by exchanges can be adopted, it may fundamentally change the path for ETF listings and open the door for more products. However, before the standards are truly implemented, each new application still faces complex compliance evaluations, and the market cannot rule out the possibility of delays or even rejections.
The two ETF applications from Truth Social are still under review, and there is a long way to go before approval results are available. The SEC is currently still cautiously reviewing multi-asset ETFs, and it is uncertain whether they can be quickly approved in the short term. However, this round of applications resonates with the upcoming discussions on universal listing standards, reflecting that crypto ETFs are transitioning from pilot programs to a broader product phase. Once the regulatory path is clarified, market competition will rapidly intensify.
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