- An ETF combines multiple major cryptocurrencies.
- Passive management with no leverage or derivatives.
- Custody and staking by Crypto.com.
The Trump Media & Technology Group has submitted an application to the US Securities and Exchange Commission in order to launch the Truth Social Crypto Blue Chip ETF.
Source – sec.gov
The fund offers direct exposure to five of the largest cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Cronos (CRO), and Ripple XRP. The ETF will simplify digital asset investing by bundling the assets into a single product and offering it for trading on the NYSE Arca.
Source – sec.gov
The suggested investment is 70 percent Bitcoin, 15 percent Ethereum, 8 percent Solana, 5 percent Cronos, and 2 percent XRP. The ETF is a passive investment instrument that will follow the market values of these underlying assets.
The fund will not employ leverage or speculative techniques or derivatives. According to the filing, the Trust aims to broadly represent the performance of the prices of the Portfolio Assets prior to payment of expenses and liabilities.
Crypto.com will store, stake, and liquidate the ETF. Sponsor Yorkville America Digital oversees compliance and operations. Authorized participants will create and redeem the ETF shares in blocks of 10,000 based on the registration statement.
The fund will compute the ETF’s value daily and use CME CF reference rates for Bitcoin and Ethereum. The filing states that it will store the underlying crypto assets in cold storage, separated from other customer assets.
The ETF will stake Eth, Sol, and Cronos to generate greater fund rewards. The authorization from the SEC in the Form 19b-4 is required in order to activate the registration statement. The NYSE Arca will trade ETF shares if the proposal is accepted. There does not seem to be a ticker symbol for the fund.
Regulatory Review and Market Impact
The SEC has accepted the filing, initiating the examination of the regulation. Yorkville America Digital sponsors the ETF, which is organized as a Nevada business trust, and Crypto.com serves as the sole digital asset custodian and prime execution agent.
Due to its lack of status as an investment business or commodities pool, the ETF will not be subject to regulation by the CFDTC.
Increased activity in the cryptocurrency ETF market has coincided with the ETF’s introduction. Additionally, major asset managers Bitwise, Grayscale, and Franklin Templeton have all submitted listings for cryptocurrency exchange-traded funds.
The SEC is also reportedly planning to introduce a simplified listing format for crypto ETFs to streamline the approval process. Trump Media has made a huge stride forward for the digital asset sector with the Truth Social Crypto Blue Chip ETF. The program is after the launch of spot Bitcoin ETFs in January 2024, which has increased the market for crypto investment products.
The new ETF will offer a clear way for investors to enter into a diversified basket of the top cryptocurrencies, without necessarily needing to acquire each asset separately.
The proposed ETF targets both retail and institutional investors. The fund will create and redeem shares in large shares so as to maintain the ETF price near the value of the crypto assets held by the fund.
Regulators could allow in-kind transactions if they approve them, enabling authorized participants to buy or sell crypto in exchange for ETF shares.
Cronos, the native cryptocurrency of the Crypto.com network, is featured, which is an important thing to notice. Market information indicates that the share price of CRO increased by more than 12 percent with the announcement of the news, representing a higher level of investor interest after the filing of the ETF.
For the Truth Social Crypto Blue Chip ETF, the SEC has not yet issued a ruling. If approved, the new fund will join the long list of crypto ETFs currently available to U.S. investors and will further expand access to digital markets from traditional equity markets.
