Two top Wall Street regulators are telling issuers not to be shy when it comes to filing for new spot crypto products.

The SEC and CFTC issued a rare joint statement last week informing asset managers that there is nothing prohibiting the trading of spot crypto products on registered exchanges, like the NYSE or NASDAQ. The agencies also said they are ready to support the consideration of new fillings for “certain spot crypto asset products,” although there were no further details on what those funds may actually entail. The guidance, however, will likely continue crypto’s push toward mainstream acceptance in the world of traditional finance.

File First, Details Later

Current SEC Commissioner Paul Atkins, a Trump appointee, has made it clear that crypto is on the docket for 2025 and beyond. The agency under his leadership already approved in-kind redemptions for spot Bitcoin and Ethereum ETFs earlier this month. The latest guidance, despite not substantively changing any laws or regulations, signals the agency’s openness to reviewing new crypto filings.

The language is likely intentionally vague so that the agencies can let issuers file and see what comes in, said VettaFi Head of Sector and Industry Research Roxanna Islam. “I doubt they’re going to say something like, ‘Now we can trade all crypto products,’” she said. “They’re opening it up to see what will be filed first.”

Other items in the statement include:

• CFTC-registered designated contract markets and foreign boards of trade, as well as SEC-registered national securities exchanges, “aren’t prohibited” from trading spot crypto products.
• The Divisions will “promptly review filings and requests” by these exchanges and “stand[s] ready to engage regarding any questions.”

“One of the advantages of investing in [crypto] through a [spot product] is that you don’t have to go through an exchange like Kraken,” said Islam. “This gives a little bit more comfort to investors that now they’re trading on mainstream exchanges. So it could take away some [spot crypto ETF] share.”

Around to Crypto in 80 Days. The guidance echoes earlier commitments from Atkins and his CFTC counterpart, acting chair Caroline Pham, to move quickly when it comes to regulating crypto. The overall message for the market is that they want spot crypto products to be regulated, and fast. Still, much about how this will work in practice remains undefined. “We don’t really know what sort of trading restrictions these will have,” Islam said. “There’s still a lot of things up in the air.”

The streaming wars are over, and media stocks are starting to show it.

After years of struggling to churn a profit, media behemoths are reaping returns from their investments in streaming services following a viewership shift away from linear networks like cable, resulting in media ETFs outperforming of late. Analysts now recommend buying Disney’s stock as the company rallies from live sports and a booming ad market after nearly a decade of losses. While options for ETFs in the media and entertainment space are limited, the success of streaming — and of media companies more broadly — can be a sign of broader economic growth, experts said. This means, however, that some companies’ tentative success is subject to change.

“Most of the legacy media companies can survive,” said Matthew Dolgin, Morningstar’s senior equity analyst covering media and telecommunications. “I think the worst of the pain for the biggest legacy media names is in the past, but smaller companies that rely mostly on linear networks will be challenged.”

Profitability Plot Twist

Streaming began to overtake cable as the main way people get their film and TV fix about a decade ago, but it struggled to generate profits even for media behemoths. In 2022, the high up-front costs of launching a streaming service caused the big players — Paramount, Comcast, Disney and Warner Bros. Discovery — to lose about $10 billion on streaming. Even Netflix, arguably the winner of the streaming wars, took a major hit, its stock plummeting more than 40%, in part due to the artificial COVID-19 bump of 2020 when TV-watchers were more inclined to binge from home. Now, however — due to raised subscription costs, password crackdowns, layoffs, live-streaming replacing scripted content and increased ad revenue — streaming has begun to be profitable. Dolgin said that will only continue as consolidation drives the grouping together of services and as the landscape becomes less fragmented. “I anticipate the television subscription and viewing experience for consumers looking … like it’s been with pay TV, meaning subscriptions and experiences will be bundled,” he said.

Some ETFs with exposure to entertainment sector giants include:

• Invesco’s Dynamic Leisure and Entertainment ETF (PEJ), which is up 14.45% year-to-date.
• Pacer Bluestar Digital Entertainment ETF (ODDS), which is up 34% year-to-date.

Back to the (Streaming) Future. The bigger question for investors now, Dolgin said, is long-term viability. Success boils down to two factors — content relevance in a streaming-first world, and how effectively streaming revenues offset cable TV losses. For investors, intra-sector diversification isn’t much of a solution, he added, since it’s no secret that streaming is the future — not legacy networks. “One could pile into Netflix to have no exposure to legacy linear networks … but Netflix is more than priced for perfection already, and this will not be a winner-takes-all industry,” Dolgin added.

A new ETF, launched by a former Jane Street quant trader, is roaring into the fight against unwanted dividends.

That product, the LionShares U.S. Equity Total Return ETF (TOT), launched last week. Unlike other entrants in the emerging world of dividend-skipping ETFs, the LionShares ETF gives investors exposure to the broad US equity market, its founder said. “TOT has the goal of minimizing distributions. That isn’t really commonplace. We’ve seen the opposite, where funds are trying to maximize distributions,” LionShares CEO Sofia Massie said about income-focused funds. “This type of product was missing from the market.”

No Paws in Trading

Rather than holding individual stocks and selling them just ahead of their dividend dates, the LionShares ETF invests in other ETFs “in a manner intended to minimize the fund’s need to make distributions,” according to the prospectus. That also makes operations simpler and helps keep expenses low with the actively managed ETF charging 7 basis points after an 18 basis-point fee waiver. Using a small number of ETFs as holdings, the fund will have exposure to 1,500 to 2,000 publicly traded companies, Massie said. Avoiding dividends keeps the ETF invested, rather than having to reinvest dividends, and maintains the tax benefits of the ETF structure.

“This product is competing with other broad market ETFs, so the management fee is going to be important for those cost-sensitive investors,” Massie said.

Other niche products in the dividend-avoiding ETF market include:

• The Roundhill S&P 500 No Dividend Target ETF (XDIV), which launched in July.
• F/m’s Compoundr High Yield Bond (CPHY) and Compoundr U.S. Aggregate Bond (CPAG) ETFs, which debuted last month.

The new ETF is designed to be a core holding for long-term investors, Massie said. “This is meant to [have] a very broad appeal, very efficient, something you’re going to hold in your portfolio year after year.”