Amid the fervor generated by the latest launches of President Donald Trump and First Lady Melania’s memecoins, REX Shares and Osprey, have captured attention by submitting filings for ETFs associated with several of the most popular cryptos: TRUMP, Bonk Inu (BONK), and Dogecoin (DOGE).
New 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, similar to crypto futures ETFs, allowing them to hold a mix of derivatives and assets through a Cayman subsidiary.
Seyffart highlighted that this structure is reminiscent of strategies used in commodity ETFs, designed to minimize tax complications, particularly avoiding K-1 forms, which can allegedly complicate tax filings for investors.
The newly proposed funds aim to provide exposure to their respective reference assets through investments in a subsidiary organized in the Cayman Islands, called the REX-Osprey™ TRUMP (Cayman) Portfolio S.P.
This subsidiary will be wholly owned by the fund and is expected to hold no more than 25% of the fund’s total assets. This approach not only allows for diversified investment strategies but also 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 is also classified as “non-diversified” under the Investment Company Act of 1940, allowing it greater flexibility in its investment decisions.
Additionally, the fund intends to allocate its remaining assets to various cash investments such as US Treasuries, money market funds, and other high-quality cash equivalents, aimed to enhance liquidity and provide a safeguard for the fund’s investments.
The momentum of these filings reflects a broader trend in the crypto market, as Eric Balchunas, Seyffart’s colleague, pointed out that the number of crypto ETFs filed with the SEC has now reached an impressive 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 coming weeks.
However, Balchunas cautions that while the influx of new ETFs is exciting, the majority of investment capital will likely continue to flow into spot Bitcoin ETFs.
Balchunas likens the crypto market to the commodities sector, where gold remains dominant while silver and lesser-known commodities like palladium and aluminum occupy niche positions.
In this landscape, mainstream cryptocurrencies such as Bitcoin and Ethereum are expected to attract the bulk of investment, while memecoins may find themselves in a more fringe position, the expert further asserted.
At 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
