ETF Issuers Scamper to File for Altcoins Funds

Thousands of altcoins are just waiting for the light to turn green. 

The Securities and Exchange Commission has received at least a dozen requests from issuers looking to launch funds that track so-called altcoins that have smaller market caps and generally much larger price swings. If any get the OK, it could pave the way for funds that hold everything from Tether, DOGE, and even (sigh) Fartcoins.

The funds aren’t expected to be a game changer for crypto-first clients, but they could offer diversification in a broader bitcoin portfolio, or at the very least, open up an easy avenue for them to dabble in the growing world of altcoins.

Who Is This Even For?

Advisors are warming up to the idea of adding crypto to client portfolios. The number of advisors who will at least discuss crypto products with some of their clients in the future is expected to increase, according to a Cerulli report from July. Still, at the time, just 2.6% of advisors were recommending crypto. Mike Casey, founder of AE Advisors, said he started recommending Bitcoin products early on, but doesn’t see much appeal in altcoins like Litecoin as the price disparities are just enormous. 

It all begs the question, who are these even for? “I don’t know,” said Matt Tuttle, CEO of Tuttle Capital Management, which recently filed requests to launch 10 funds that would track altcoins like $TRUMP, $MELANIA, and Polkadot. “It’s possible that the universe of coins that serious money is trading expands,” he said. “I don’t know what those coins will be, but ETFs open up that process.”

Whether these types of funds can gain mainstream traction with investors is still foggy, but issuers, like Tuttle, are trying to stay ahead of the curve:

• JPMorgan estimates that Solana and XRP ETFs could attract up to $14 billion in inflows within the first year of their approval, Bloomberg reported.
• The SEC has already acknowledged a request for a Litecoin ETF from Nashville-based Canary Capital, and Greyscale wants to convert its XRP Trust into an ETF.

Trump Bump. It’s also hard to not notice the pro-crypto environment, Tuttle said. President Trump launched his own meme coin in January and the SEC formed a crypto task force that’s expected to push the industry forward. Trump named Craft Ventures co-founder David Sacks as crypto czar. “I don’t know what a crypto czar is,” Tuttle said, “but the fact that we have one is pretty cool.”