Rex Shares Proposes TRUMP Memecoin ETF Amid Regulatory Shifts
By: Isha Das
Rex Shares has initiated several cryptocurrency-focused ETF filings with the Securities and Exchange Commission (SEC), marking a distinct stride into the realm of memecoins and other digital assets. Among the proposed Exchange Traded Funds (ETFs) are those dedicated to TRUMP, a memecoin linked to former President Donald Trump, as well as other popular digital currencies such as DOGE, BONK, Bitcoin, Ethereum, XRP, and Solana.
The unprecedented filings indicate that each ETF aims to allocate a substantial portion, at least 80%, of its net assets to a particular reference asset. This allocation could occur through direct asset holdings or through financial derivatives like futures and swaps. As per Bloomberg's ETF expert, Eric Balchunas, the strategy adopted by Rex Shares is notably described as "surreal."
The TRUMP ETF is structured to track the TRUMP memecoin, a digital asset of considerable interest since its inception coincided with Donald Trump's entrance as U.S. President. The filing suggests that the ETF could achieve exposure to the TRUMP coin via REX-Osprey TRUMP Subsidiary, utilizing futures contracts and swap agreements. Notably, TRUMP's market behavior has exhibited significant volatility, with its market capitalization oscillating rapidly from a peak of $15 billion to a drastic decline of nearly 50% shortly thereafter.
This development coincides with recent changes within the SEC, notably the resignation of Gary Gensler. The potential acceptance of these novel ETFs by the SEC could signal a shift in regulatory attitudes towards innovative financial products, especially those tied to the burgeoning field of digital assets, including memecoins. The decision could take into account portfolio composition and disclosure of risks associated with such assets, which have previously witnessed a cautious regulatory approach. Moving forward, observers are keenly watching how these submissions might shape the future landscape of ETF offerings.
