Issuers are exploring the limits of the market, as shown by Tuttle’s filing for 10 leveraged cryptocurrency ETFs, analysts report.
Analysts view Tuttle Capital’s filing for memecoin ETFs, which feature Donald and Melania Trump, as a step toward probing the boundaries of regulations from the Trump era.
Tuttle Capital’s recent move to propose 10 leveraged ETFs based on cryptocurrencies, some involving prominent memecoins, is seen by analysts as a way for issuers to explore the boundaries set by Trump-appointed crypto regulators.
Tuttle’s ETF filings feature two-times leveraged long funds tied to memecoins inspired by Donald and Melania Trump, Bloomberg’s James Seyffart noted in a Jan. 27 X post.
Seyffart noted that Tuttle’s proposed funds go beyond the Official Trump (TRUMP) and Melania Meme (MELANIA) tokens to include “a bunch of memecoin products and assets” not currently covered by ETFs.
Tuttle’s proposal includes additional ETFs that would be long on cryptocurrencies such as XRP, Solana, Litecoin, Chainlink, Cardano, Polkadot, BNP, and the Bonk memecoin.
“To be very clear here. This is a case of issuers testing the limits of what this SEC is going to allow,” he said.
Trump campaigned on reducing what he viewed as regulatory opposition to cryptocurrency, and after assuming the presidency, the SEC introduced a crypto task force, overseen by Commissioner Hester Peirce, to create a framework for digital assets.
“I’m expecting the new crypto task force led by Hester Peirce to likely be the lynchpin in determining what’s gonna be allowed vs what isn’t,” Seyffart added.
Eric Balchunas, a senior ETF analyst at Bloomberg, commented on X that Tuttle’s filings stand out as “unusual” since they propose highly leveraged ETFs for assets without standard ETF options.
While regular ETFs track the performance of their underlying index at a 1:1 ratio, leveraged funds follow at a 2:1 ratio or higher.
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“This is a 40-act filing, so in theory, unless the SEC disapproves them, they could be out and trading in April,” Balchunas said.
“It will be interesting to see where the SEC draws [a] line (if at all) and why,” he said, also noting that filings for Dogecoin and TRUMP have not been pulled.
In a filing submitted on January 21, asset managers Osprey Funds and REX Shares signaled their plans to launch ETFs targeting popular memecoins, including DOGE, TRUMP, and BONK.
With more firms entering the ETF market, the SEC approved Bitcoin and Ether index ETFs from Hashdex and Franklin Templeton on December 20.
Following Bitwise’s termination of its acquisition, Osprey Funds proposed converting its Osprey Bitcoin Trust (OBTC) into a spot Bitcoin ETF.
As per VettaFi, a global ETF database and analytics service, 32 Bitcoin ETFs trade in the US, but only 11 qualify as spot Bitcoin ETFs.
