Amid the fervor generated by the most recent launches of President Donald Trump and First Lady Melania’s memecoins, REX Shares and Osprey, have captured attention by submitting filings for ETFs related to several of the preferred cryptos: TRUMP, Bonk Inu (BONK), and Dogecoin (DOGE).
Latest ETFs Targeting Memecoins And Major Cryptos
The filing, disclosed by James Seyffart, a Bloomberg ETF expert, also includes ETFs for major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), Solana SOL), and XRP.
Notably, these products are filed under the 1940 Act, just like crypto futures ETFs, allowing them to carry a combination of derivatives and assets through a Cayman subsidiary.
Seyffart highlighted that this structure is harking back to strategies utilized in commodity ETFs, designed to reduce tax complications, particularly avoiding K-1 forms, which may allegedly complicate tax filings for investors.
The newly proposed funds aim to supply exposure to their respective reference assets through investments in a subsidiary organized within the Cayman Islands, called the REX-Osprey™ TRUMP (Cayman) Portfolio S.P.
This subsidiary shall be wholly owned by the fund and is predicted to carry not more than 25% of the fund’s total assets. This approach not only allows for diversified investment strategies but additionally helps the fund meet the income sourcing requirements established under the Internal Revenue Code.
Digital Assets ETF Filings Surge To 33: Experts Predict Further Growth
The fund’s structure can also be classified as “non-diversified” under the Investment Company Act of 1940, allowing it greater flexibility in its investment decisions.
Moreover, the fund intends to allocate its remaining assets to varied money investments reminiscent of US Treasuries, money market funds, and other high-quality money equivalents, aimed to reinforce liquidity and supply a safeguard for the fund’s investments.
The momentum of those filings reflects a broader trend within the crypto market, as Eric Balchunas, Seyffart’s colleague, identified that the variety of crypto ETFs filed with the SEC has now reached a powerful 33.
The recent regulatory environment has seen a doubling of filings since Gary Gensler’s departure from the US Securities and Exchange Commission (SEC) on Friday, with expectations that this number could swell to 50 in the approaching weeks.
Nevertheless, Balchunas cautions that while the influx of latest ETFs is exciting, the vast majority of investment capital will likely proceed to flow into spot Bitcoin ETFs.
Balchunas likens the crypto market to the commodities sector, where gold stays dominant while silver and lesser-known commodities like palladium and aluminum occupy area of interest positions.
On this landscape, mainstream cryptocurrencies reminiscent of Bitcoin and Ethereum are expected to draw the majority of investment, while memecoins may find themselves in a more fringe position, the expert further asserted.
On the time of writing, the President’s official memecoin, TRUMP, was trading at $39,044, down 50% from its peak of $79 over the weekend.
Featured image from DALL-E, chart from TradingView.com