US Presidential Election to Decide Fate of Cryptocurrency ETFs
The upcoming US presidential election on November 5 is poised to have a significant impact on the cryptocurrency market, particularly with regards to the approval of cryptocurrency exchange-traded funds (ETFs). Over half a dozen proposed cryptocurrency ETFs are waiting for the green light from regulatory authorities, and the outcome of the election could be the deciding factor. In 2024, asset managers have submitted a flurry of regulatory registrations to organize ETFs for various cryptocurrencies, including Solana (SOL), XRP (XRP), and Litecoin (LTC).
Crypto Owners Weigh In
A significant number of crypto owners, about three out of four, have stated that a candidate’s crypto policy will influence their vote. This is not surprising, given the aggressive regulatory stance taken by the US Securities and Exchange Commission (SEC) under President Joe Biden. The SEC has implemented over 100 regulatory measures against industry companies, leading many to speculate about the potential impact of a change in administration.
Trump’s Crypto Stance
Donald Trump, the Republican candidate, has expressed his desire to make America the “crypto capital of the world.” In contrast, his opponent, Kamala Harris, has been relatively quiet on the issue. According to Eric Balchunas, an ETF analyst at Bloomberg Intelligence, the submissions for crypto ETFs can be seen as “call options for a Trump victory.” Balchunas has suggested that if Trump wins, it could lead to a more favorable regulatory environment for cryptocurrencies.
What to Expect if Trump Wins
If Trump emerges victorious on November 5, we can expect significant developments in the crypto ETF space. Bitcoin (BTC) and Ethereum (ETH) are likely to lead the charge, given their dominant market capitalization. Several fund issuers, including Vaneck and 21shares, have already submitted registrations for SOL ETFs, and it is possible that these could be approved in the near future.
Altcoin ETFs
In addition to SOL ETFs, there are also plans for ETFs tracking other altcoins, such as XRP and Litecoin (LTC). Canary Capital, a crypto asset manager, has submitted registrations for both XRP and LTC ETFs. While the SEC has previously claimed that SOL is a security, Vaneck’s head of digital assets research, Matthew Sigel, believes that it is a commodity, similar to BTC and ETH.
Crypto Index ETFs
Another area of development is crypto index ETFs, which track a basket of cryptocurrencies. Grayscale has submitted a registration for its Digital Large Cap Fund (GLDC), which includes BTC, ETH, SOL, XRP, and Avalanche (AVAX). According to grayscale, this could represent the first national securities exchange rule set that allows the listing and trading of shares of multi-crypto asset ETFs.
In conclusion, the US presidential election is poised to have a significant impact on the cryptocurrency market, particularly with regards to the approval of cryptocurrency ETFs. A Trump victory could lead to a more favorable regulatory environment, while a Harris victory may result in a continuation of the current aggressive stance. As the election approaches, it will be interesting to see how the market reacts and which direction the regulatory landscape takes.
