Simply put
- Canary Capital has filed to create President Donald Trump’s meme coin, marking it as the first spot ETF directly linked to him.
- This fund is entirely focused on the President’s meme coin, unlike prior proposals which involved diversification or leverage. Experts find the approval likely, but note that such ETFs typically need related futures trading for six months, which isn’t happening for Trump’s assets.
In a recent filing, Canary Capital put forth a spot ETF that is entirely centered on President Trump’s meme coin, potentially the first of its kind on Wall Street.
Meanwhile, two other ETF firms also submitted applications to the SEC earlier this year, aiming to launch Trump’s exchange trade funds under the Investment Companies Act of 1940. Unlike the Canary proposal, these funds would not invest directly in the meme coin but rather in a Cayman Islands subsidiary that holds Trump’s coin while also putting money into more stable cash equivalents.
Today, Canary sought approval for the Trump ETF under the Securities Act of 1933. If approved, investors would gain full exposure to the President’s meme coin, which would be required to be held under strict custodial standards in the U.S.
Bloomberg ETF analyst Eric Balknath suggested that the SEC might approve Canary’s application. Generally, assets underlying spot ETFs need to trade as futures first to track their price, requiring at least six months of trading. As it stands, Trump’s futures products haven’t met this criterion yet.
However, there’s a chance Trump could pivot towards a more diversified ETF route from Canary using the 1940 Corporations Act.
The SEC’s decision regarding the Canary Trump ETF is indeed a bit tricky, especially given the scrutiny it has faced since January regarding how it approaches cryptocurrency ventures.
Republican SEC commissioner Hester Peirce noted earlier this year that there may not be a clear regulatory oversight over Trump’s memecoin project.
A few weeks later, the SEC made a statement clarifying that all memecoins aren’t considered securities, thus falling outside their regulatory scope.
If Trump’s SEC does approve the integration of his meme token with Wall Street, it would represent a significant shift in the landscape of cryptocurrency for a U.S. president, especially as the coin has seen an increase of over 70% since its launch in January.
Analysts foresee that the SEC may greenlight other Spot Meme Coin ETFs by the end of the year, though regulators have recently been hesitant about some pending applications.
