Emily Walker
Following the buzz around the latest memecoins launched by President Donald Trump and First Lady Melania, REX Shares and Osprey have grabbed attention with their recent ETF filings linked to popular cryptocurrencies like TRUMP, Bonk Inu (BONK), and Dogecoin (DOGE).
ETFs Focused on Memecoins and Key Cryptos
The recent submission from these firms, shared by Bloomberg ETF analyst James Seyffart, details also include ETFs for major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and XRP.
These proposed ETFs are structured under the 1940 Act, similar to crypto futures ETFs, permitting them to manage a combination of assets and derivatives via a Cayman Island subsidiary.
Seyffart noted that this structure mimics techniques used in commodity ETFs to alleviate tax issues, notably by steering clear of K-1 forms that can complicate tax reporting for investors.
The planned funds aim to give investors access to their reference assets by investing in the REX-Osprey
TRUMP (Cayman) Portfolio S.P., a subsidiary set up for these purposes.
This subsidiary will be entirely owned by the fund and is not expected to constitute more than 25% of its total assets. This strategy enables diversified investment approaches while aligning with the income sourcing standards laid out in the Internal Revenue Code.
Increase in Digital Asset ETF Filings: Future Growth Anticipated
The fund’s format is regarded as “non-diversified” according to the Investment Company Act of 1940, which provides enhanced flexibility in investment choices.
Furthermore, the fund plans to use the remainder of its assets in various cash instruments such as US Treasuries and money market funds, aiming to improve liquidity and protect the portfolio’s investments.
This surge in filings is part of a wider trend in the crypto domain. Eric Balchunas, Seyffart’s colleague, pointed out that the number of crypto ETFs filed with the SEC has jumped to 33.
The current regulatory climate has led to a doubling in the number of filings following Gary Gensler’s exit from the US Securities and Exchange Commission (SEC), with projections suggesting this could rise to 50 in the near future.
Despite the excitement surrounding the new ETFs, Balchunas warns that most investment funds will likely still converge on spot Bitcoin ETFs.
He draws a parallel between the crypto landscape and the commodities market, suggesting that while Bitcoin remains the lead investment, Ethereum and other cryptocurrencies may continue to occupy lesser roles.
In this context, leading cryptocurrencies are poised to attract most of the investment, leaving memecoins in a more marginalized position, according to the expert.
As of now, President Trump’s official memecoin, TRUMP, is trading at $39,044, reflecting a 50% drop from its peak of $79 recently.
Featured image from DALL-E, chart from TradingView.com.