Trump Media Files for Third Crypto ETF
Trump Media filed last week with the Securities and Exchange Commission to launch a new fund, the Truth Social Crypto Blue Chip ETF, which would primarily hold Bitcoin but also Ether, Solana, Cronos and XRP. Its fees have not been disclosed, but the crypto exchange platform Crypto.com is slated to act as the fund's digital custodian.
The move is the latest foray by President Trump's media company into the increasingly deregulated, and saturated, world of crypto products.
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The filing taps into increased demand for cryptocurrencies other than Bitcoin, said Bryan Armour, Morningstar's director of ETF and passive strategies research. 'As more cryptocurrencies are approved for spot ETFs generally, I think there will be more appetite and significant product development around an indexed version of multiple cryptocurrencies,' he said, 'so my guess is they'll appear in different ways.' The problem is that Solana, XRP and Cronos aren't yet available to trade as spot funds, which has slowed the launch of index-type crypto ETFs, Armour said. That leaves little room for Trump Media's other two ETFs to differentiate themselves from existing funds.
It's only a matter of time until the SEC's approval of additional currencies opens the door for new players, however. 'It's a more level playing field because they'll be starting alongside other asset managers and there's potential to differentiate,' Armour said. '[Cronos] has a significant overweight, but that might appeal to some investors to get that type of mix.'
Trump Media, which operates Trump's Truth Social platform, has now filed for three strategies with the SEC:
The Truth Social Crypto Blue Chip ETF would have 70% of its assets allocated to Bitcoin, with 15%, 8%, 5% and 2% going to Ether, Solana, Cronos and XRP, respectively.
The Truth Social Bitcoin and Ethereum ETF would have 75% of its assets allocated to Bitcoin and 25% to Ether.
The Truth Social Bitcoin ETF would be a spot Bitcoin ETF, aiming to serve as a Bitcoin reserve for the US government.
The Blue Chip version will allocate about 5% of its holdings to Cronos — a currency developed by Crypto.com, an affiliate of the fund's custodian, Foris DAX Trust Company. That's of particular note, Armour said, because the product should have a 1% allocation based on market cap.
Name Brand? The main force behind Trump Media's crypto ETFs at present is the Trump name itself, which may not be enough, said Roxanna Islam, head of sector and industry research at VettaFi. 'They do appeal more to Trump fans or people that are anti-mainstream financial issuers. But that can only go so far,' she said, adding that fees will also play a role. 'Will they even remotely catch up? It's hard to say, because they're over a year behind.'
This post first appeared on The Daily Upside. To receive exclusive news and analysis of the rapidly evolving ETF landscape, built for advisors and capital allocators, subscribe to our free ETF Upside newsletter.
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