Bitcoin and ether will remain the dominant ETFs, analyst says.
The SEC would be cautious about approving an ETF based on a memecoin tied to the president.
There are signs that the memecoin boom would be reaching Wall Street, the financial heart of the United States and the nerve center of the world’s main financial centers. But can a cryptocurrency that originates as a joke or meme on the internet reach such serious levels to be considered a key player in global economic dynamics?
The answer to the previous question comes from Rex Shares and Osprey Fund, two companies related to investment management in the United States. Both filed with the US Securities and Exchange Commission (SEC), requests to launch exchange-traded funds (ETFs) based on the Official Trump (TRUMP) memecoinsBonk (BONK) and Dogecoin (DOGE), according to documents submitted today.
The high interest generated by the first memecoin launched by a president impacted the SOL cryptocurrency, as it was launched on its blockchain. Solana’s crypto asset has been increasing steadily since mid-October 2023 and is currently breaking records, as reported by CriptoNoticias.
In any case, the popularity of these memecoins has led Rex Shares and Osprey Fund to apply for ETFs, with the aim of marketing these cryptoassets. However, Bloomberg analyst Eric Balchunas offers a perspective more cautious, suggesting that “major assets like bitcoin and ether will continue to represent the majority of investment funds”while memecoin-based ETFs will occupy a niche market with limited attention.
On the other hand, the specialist emphasizes that there are 33 applications for cryptocurrency ETFs under review by the SEC, with expectations that this number will reach 50 in the coming weeks.
The increase in applications for exchange-traded funds reflects the increase in interest and the change in the regulatory environment since the departure of Gary Gensler as SEC chairman. Although Bitcoin and Ethereum ETFs have been approved to a limited extent, the decision on XRP, SOL and memecoin ETFs is still pending.
However, Canary Capital filed an S-1 amendment with the SEC for a litecoin (LTC) ETF, indicating progress in the approval process. According to analyst Eric Balchunas, this development bodes well for Litecoin to be the next cryptocurrency to get an ETF approved. For that reason, Balchunas suggests that the SOL and XRP ETFs should wait for the new SEC president to make the necessary reviews for these cases, which leaves them on hold. This implies that, so far, there are no guarantees of approval and that the submission of Form 19b-4 is still pending to begin the final approval or rejection process.
In this same vein, the SEC could be extremely cautious or even reluctant to approve an ETF based on an asset as fraught with ethical and legal controversies as Trump’s memecoin, which has raised serious ethical concerns about conflicts of interest and potential trafficking of influences, given that the cryptocurrency is controlled mostly by companies linked to who has just taken office as the 47th president of the United States.
