Original author: ChandlerZ, Foresight News
Trump Media Technology Group recently submitted two S-1 registration statements for crypto asset ETFs to the U.S. SEC. The groups Truth Social platform is promoting Bitcoin and Ethereum spot ETFs, as well as a combination of five mainstream crypto assets, Crypto Blue Chip ETF.
On July 2, Trump Media Technology Group announced that it had submitted an initial registration statement on Form S-1 for the Truth Social Bitcoin and Ethereum ETF to the U.S. Securities and Exchange Commission. The ETF will directly hold Bitcoin and Ethereum, with 75% of its assets invested in Bitcoin and 25% in Ethereum, and issue its shares to investors. The goal of this ETF is to keep close to the spot price of the two crypto assets, take the form of an open trust, and plan to be listed on the New York Stock Exchange.
Then on July 8, the group submitted another S-1 document to apply for the Truth Social Crypto Blue Chip ETF. The assets of the Truth Social Crypto Blue Chip ETF Trust mainly include Bitcoin, Ethereum, Solana (SOL), Ripple (XRP) and Cronos (CRO), which are held by the custodian on behalf of the trust. According to the provisions of the trust agreement, the percentage of the trusts assets allocated to the portfolio assets (allocation ratio) is initially expected to be approximately 70% Bitcoin, 15% Ethereum, 8% SOL, 5% CRO and 2% XRP.
These two applications are at the early stages of the SEC review process, but the assets involved are all mainstream cryptocurrencies with high market capitalization. The market is currently watching whether the SEC will relax its attitude towards multi-asset crypto ETFs after approving Bitcoin and Ethereum ETFs. The asset distribution proposed by Truth Social is relatively conservative and may have a certain adaptability in the current regulatory trend.
SEC is considering establishing a crypto ETF to unify listing standards
At the same time, the US SEC is discussing a universal listing standard for crypto ETFs with major exchanges. According to The Block, exchanges hope to obtain a clearly recognized listing framework in order to skip the lengthy 19 b-4 application process. Under the current mechanism, each crypto ETF needs to submit a case-by-case approval, and the longest approval period can be up to 240 days. The exchange is promoting a plan that if the ETF product meets the standard conditions, it can be directly listed for trading without having to submit it to the SEC for a vote one by one.
The standard discussion involves quantitative indicators such as market capitalization, liquidity, and network distribution. These discussions are still in the early stages, but some people within the SEC believe that the mechanism may start testing before this fall. This move is believed to simplify the application process, shorten the listing time, and improve transparency. Bloomberg analyst James Seyffart said that once the standards are released, the market will usher in a round of centralized filings for crypto ETF products, and multiple currencies including Solana, XRP and Dogecoin may be approved in the short term.
Truth Social entered the market at this transitional stage. The product declaration did not emphasize the technical highlights, nor did it introduce complex derivative mechanisms. Both ETFs adopt the traditional open-end trust form, similar to the approved Bitcoin spot ETF. The difference is that the blue chip ETF contains more currencies and involves weight allocation between assets. In the absence of a unified review mechanism, it is unclear whether the fund can be regarded as a qualified product.
The motivations and market environment behind political statements
After the Trump administration came to power, the frequency of its statements on crypto assets has increased significantly. In March of this year, Trump first said on Truth Social, The U.S. cryptocurrency reserves will boost this critical industry after years of corrupt attacks by the Biden administration. Thats why my digital asset executive order instructs the Presidential Working Group to advance strategic crypto reserves, including XRP, SOL, and ADA. I will ensure that the United States becomes the cryptocurrency capital of the world. We are making America great again!
The executive order signed by Trump later revealed that it would include two parts: a strategic reserve and an inventory of cryptocurrencies. The strategic reserve will only contain BTC (the digital asset with the largest value storage), using about 200,000 tokens held by the government through criminal and civil forfeiture over the years. The other is a digital asset reserve that includes assets other than Bitcoin, which may be XRP, ADA, ETH and SOL, and possibly other assets. The main difference between reserves and inventories is that the government will not actively look for ways to buy more inventory assets. The government will only explore the use of government funds (if they can find a budget-neutral way to do it) to purchase BTC. The Secretary of the Treasury may determine responsible management strategies, including assets that may be sold from the U.S. digital asset inventory. This has aroused outside attention to its policy direction.
In May, Politico reported that Trumps previous post on Truth Social supporting the inclusion of XRP, SOL and ADA in the crypto strategic reserve was actually promoted by a lobbyist, Ballard Partners. Trump himself was not aware of it, and the lobbyists had been expelled from the White House. According to three people familiar with the matter, a few minutes after the president posted, David Sacks, the cryptocurrency czar of the White House, flew into a rage and called Wells to complain. After the post about cryptocurrency was exposed, Ballard was temporarily excluded from the White House because White House staff were instructed not to meet with him. But five people close to Trump said that the dissatisfaction with Ballard went far beyond that. Some White House officials believe that Ballard is profiting from Trumps reputation and boasting that his relationship with the president and Wells is far less close than advertised. The White House declined to comment.
Despite the controversy, Trump has reiterated on multiple occasions that the crypto industry is a key growth focus for the future. According to a survey conducted by Deutsche Bank in June, American consumers are the largest user group of cryptocurrencies, mainly men and young, wealthy people. In May, the cryptocurrency adoption rate in the United States was 17%, higher than 11% in the UK and 10% in the European Union. Among young people aged 18-34 in the United States, the adoption rate of cryptocurrencies rose from 24% in January to 29% in June. The analysis pointed out that this was mainly due to the markets optimism about the prospects of Trumps support for cryptocurrency policies. Among American respondents, wealthy people accounted for 32% of cryptocurrency adopters. In addition, 23% of American men said they used cryptocurrencies for payments or personal investments, while the proportion of women was 13%. Male consumers generally believe that they have a deeper understanding of cryptocurrencies than women.
It is difficult for Truth Social to decouple its ETF application from the political environment at this time. The compliance and business logic of ETF products still need to be reviewed, but their political symbolic significance is already there. As a platform and product carrier, Truth Social has room for further commercialization. However, some voices in the market are reserved about the actual influence of this product. About 30% of the assets in blue-chip ETFs come from tokens other than Bitcoin, and the liquidity and market stability of these assets are relatively limited. In particular, CRO and XRP have more price fluctuations and regulatory disputes, and there are still differences as to whether they are suitable as the underlying assets of publicly traded funds. When reviewing spot ETFs, the SEC has strict requirements for asset security, custody arrangements and valuation mechanisms.
Investors are also evaluating whether these products can remain attractive in the long term. Currently, there are more than 10 Bitcoin spot ETFs trading in the market, most of which are concentrated in the hands of asset management giants. Truth Social lacks operational experience in the financial field, and how to establish market share is a practical problem. In addition, operational factors such as fund rates, liquidity support, and market maker cooperation have not yet been clarified, which may also affect its market performance.
The window period between regulatory advancement and market expansion
When deciding whether to approve these new ETF products, the US SEC must deal with political pressure and respond to the markets call for more product types. If the unified standards promoted by the exchange are adopted, it may fundamentally change the path of ETF listing and open up the entry for more products. However, before the standards are truly implemented, each new application still needs to face complex compliance assessments, and the market cannot rule out the possibility of delays or even rejections.
Truth Socials two ETF applications are still in the acceptance stage, and there is still a long time before the approval results. The SEC is still cautiously reviewing multi-asset ETFs, and it is uncertain whether they can be approved quickly in the short term. However, this round of applications echoes the upcoming discussion on universal listing standards, and also reflects that crypto ETFs are moving from pilots to a wider product stage. Once the regulatory path is clear, market competition will rapidly intensify.
