With Trump confirmed to return to the White House, crypto-friendly sentiment is soaring, and Wall Street is ready to unleash a new generation of speculative products in the $3.2 trillion industry to satisfy investors' appetites.
Bitcoin spot ETFs attracted $7.2 billion in funds after the election
Since the election (11/4), Bitcoin spot ETFs have attracted up to $7.2 billion in inflows.
ETF issuers are eager to apply for competitive coin ETFs
According to Bloomberg, as Trump’s second presidential term is about to begin, high-level participants and lawyers involved in ETFs say they are developing strategies to cater to all investor tastes. The range of products they describe is broad, from defensive ETFs aimed at professional fund managers curious about cryptocurrencies to fully speculative bets targeting 'gamblers'.
Aisha Hunt, head of Kelley Hunt law firm, stated:
The ETF industry is entering a 'wild west era' under new SEC leadership, with new cryptocurrency-linked ETFs and increasingly complex leveraged and inverse products leading the trend.
Since the election, Bitcoin's price has risen by over 40%. Gary Gensler of the U.S. Securities and Exchange Commission (SEC) is set to step down as chairman on January 20, 2025, the day of Trump's inauguration, while competitive coins labeled as unregistered securities by the SEC are rising rapidly.
(Is the age of competitive coins about to arrive? SOL, XRP, ADA have greatly outperformed Bitcoin since the election)
This has led fund issuers to boldly propose various ideas, incorporating more speculative crypto products into ETFs, such as 'competitive coins' (also known as altcoins). Several digital asset companies have applied to the SEC for ETFs that track cryptocurrencies like Solana, XRP, and Litecoin, with Grayscale proposing to convert its Grayscale Large Cap Fund (GDLC) into an ETF, which includes Bitcoin, Ethereum, Solana, XRP, and Avalanche.
(Grayscale Large Cap Fund GDLC proposal to convert to ETF may receive SEC approval for multi-currency ETFs)
Hany Rashwan, CEO of ETF issuer 21Shares, also stated that due to the expectation that the Trump administration will implement 'friendly crypto regulations', 21Shares will prepare more crypto ETFs and has reserved trading codes for a Dogecoin ETF.
Chris Newhouse, research director at digital asset hedge fund Cumberland Labs, stated that tokens like Aave, Uniswap, and Maker are also ready for ETF products.
Various crypto ETFs will be presented in a theatrical fashion based on TradFi scripts
John Davi, Chief Investment Officer at Astoria Portfolio Advisors, is considering adding Bitcoin risk to the ETF model portfolio he manages if cryptocurrencies retreat from historical highs. He expects product issuers to soon offer 'smart-beta' strategies that combine the advantages of active and passive investing. This strategy aims to select and weight assets using specific factors (such as value, momentum, low volatility, etc.) to achieve returns that surpass traditional market indices.
You may have an ETF that actually allows you to access other cryptocurrencies beyond Bitcoin and adopt some form of active management or trend-following approach.
Shiliang Tang, president of major cryptocurrency trading firm Arbelos Markets, also expects that proven investment strategies will be incorporated into cryptocurrency ETFs.
They will run a TradFi script, but the strategies will definitely not be traditional, including Bitcoin-plus, dominance, leveraged ETFs, altcoin ETFs, and basket ETFs are all possible.
This article The Wall Street ETF team is ready for more theatrical crypto ETF scripts first appeared in Chain News ABMedia.
