Trump Media Group applies for crypto ETFs, US SEC promotes unified standards to simplify approval process

Trump Media & Technology Group recently submitted two S-1 registration statements for encryption asset ETFs to the U.S. SEC. The group’s Truth Social platform is promoting Bitcoin and Ethereum spot ETFs, as well as a composite “encryption blue-chip ETF” composed of five mainstream encryption assets.

On July 2, according to a statement from Trump Media & Technology Group, it has submitted an initial registration statement on Form S-1 for the Truth Social Bitcoin and Ethereum ETF to the U.S. Securities and Exchange Commission. The ETF will directly hold Bitcoin and Ethereum, with 75% of its assets invested in Bitcoin and 25% in Ethereum, and will issue its shares to investors. The goal of this ETF is to closely track the spot prices of the two encryption assets, taking the form of an open-end trust, and plans to be listed on the NYSE.

On July 8, the group submitted another S-1 filing to apply for the “Truth Social Crypto Blue Chip ETF.” The assets of the Truth Social Crypto Blue Chip ETF Trust primarily include Bitcoin, Ethereum, Solana (SOL), Ripple (XRP), and Cronos (CRO), held by a custodian on behalf of the trust. According to the trust agreement, the trust will allocate its assets to the percentage of the portfolio assets (allocation ratio) which is initially expected to be approximately 70% Bitcoin, 15% Ethereum, 8% SOL, 5% CRO, and 2% XRP.

These two applications are at the early stage of the SEC review process, but the assets involved are all mainstream encryption currencies with a high market value. The market is currently observing whether the SEC will relax its stance on multi-asset encryption ETFs after approving Bitcoin and Ethereum ETFs. The asset distribution proposed by Truth Social is relatively conservative and may have some adaptability in the current regulatory environment.

SEC is brewing the establishment of a unified listing standard for encryption ETFs.

Meanwhile, the U.S. SEC is discussing a universal listing standard for cryptocurrency ETFs with major exchanges. According to The Block, the exchanges are seeking a clearly recognized listing framework to bypass the lengthy 19b-4 application process. Under the current mechanism, each cryptocurrency ETF must submit for individual approval, with the longest approval period reaching up to 240 days. The exchanges are pushing for a proposal that if ETF products meet the standard conditions, they can be listed for trading directly, without needing to submit for SEC votes one by one.

The standard discussion involves quantitative indicators such as market capitalization, liquidity, and network distribution. These discussions are still in the early stages, but some insiders within the SEC believe that the mechanism may begin testing before this fall. This move is seen as a way to simplify the application process, shorten the listing time, and improve transparency. Bloomberg analyst James Seyffart stated that once the standards are established, the market will see a wave of concentrated applications for encryption ETF products, with several currencies including Solana, XRP, and Dogecoin likely to be approved in the short term.

The entry point for Truth Social is at this transitional stage. The product declaration does not emphasize technical highlights and does not introduce complex derivative mechanisms. Both ETFs adopt the traditional open-end trust format, similar to the already approved Bitcoin spot ETFs. The difference is that the blue-chip ETF includes more cryptocurrencies and involves weight allocation among the assets. In the current absence of a unified review mechanism, it is unclear whether the fund can be regarded as a “qualified product.”

The motivations behind political statements and the market environment

After the Trump administration came to power, the frequency of statements regarding encryption assets significantly increased. In March this year, Trump first stated on Truth Social, “The U.S. cryptocurrency reserves will enhance this critical industry, which has been subject to corrupt attacks from the Biden administration for many years. This is why my digital asset executive order instructs the presidential task force to advance a cryptocurrency strategic reserve that includes XRP, SOL, and ADA. I will ensure that the U.S. becomes the world’s cryptocurrency capital. We are making America great again!”

Subsequently, the executive order signed by Trump revealed that it would include two parts: the encryption strategic reserves and the inventory. The strategic reserves will only contain BTC (the digital asset with the largest value storage), using about 200,000 tokens held by the government through criminal and civil forfeiture over the years. The other part is a digital asset reserve that includes assets other than Bitcoin, which may include XRP, ADA, ETH, SOL, and possibly other assets. The main difference between reserves and inventory is that the government will not actively seek ways to purchase more inventory assets. The government will only explore purchasing BTC using government funds (if they can find a budget-neutral way to do so). The Secretary of the Treasury can determine responsible management strategies, including assets that may be sold from the U.S. digital asset inventory. This has raised concerns about its policy direction.

In May, according to Politico, a post by Trump on Truth Social supporting the inclusion of XRP, SOL, and ADA in the encryption strategic reserve was actually driven by a lobbyist, Ballard Partners, without Trump’s knowledge, and the related lobbyist has been “ousted” from the White House. According to three informed sources, just minutes after the president’s post, the White House’s “cryptocurrency czar” David Sacks became furious and called Wells to complain. Following the exposure of the post regarding encryption, Ballard was temporarily excluded from the White House as staff were instructed not to meet with him. However, five people close to Trump indicated that dissatisfaction with Ballard goes far beyond this. Some White House officials believe that Ballard is profiting from Trump’s name, boasting that his relationship with the president and Wells is far less close than advertised. The White House declined to comment.

Despite the controversy surrounding the events, Trump has reiterated on multiple occasions that the encryption industry is a key focus for future growth. According to a survey conducted by Deutsche Bank in June, American consumers are the largest group of cryptocurrency users, primarily consisting of men and younger, affluent individuals. In May, the cryptocurrency adoption rate in the U.S. was 17%, higher than the UK’s 11% and the EU’s 10%. Among the 18-34 age group in the U.S., the adoption rate of cryptocurrency rose from 24% in January to 29% in June. Analysts point out that this is mainly due to optimistic sentiment in the market regarding Trump’s support for cryptocurrency policies. Among U.S. respondents, affluent individuals make up 32% of cryptocurrency adopters. Additionally, 23% of American men stated they use cryptocurrency for payments or personal investments, compared to 13% for women. Male consumers generally believe they have a deeper understanding of cryptocurrency than women.

Truth Social’s submission of the ETF application at this time is difficult to separate from the political environment. The compliance and business logic of the ETF product still need to be reviewed, but its political symbolic significance is already present. As a platform and product bearer, Truth Social has room for further commercialization. However, there are also some voices in the market that hold a reserved attitude towards the actual influence of this product. About 30% of the assets in blue-chip ETFs come from tokens other than Bitcoin, and these assets have relatively limited liquidity and market stability. In particular, CRO and XRP have significant price volatility and regulatory controversies, and whether they are suitable as underlying assets for publicly traded funds remains disputed. The SEC has strict requirements for asset safety, custody arrangements, and valuation mechanisms when reviewing spot ETFs.

Investors are also assessing whether these products can maintain their appeal in the long term. Currently, there are over 10 Bitcoin spot ETFs trading in the market, most of which are concentrated in the hands of asset management giants. Truth Social lacks experience in the financial sector, and how to establish market share is a real issue. In addition, operational factors such as fund fees, liquidity support, and market maker cooperation have yet to be clarified, which may also affect its market performance.

The window period between regulatory advancement and market expansion.

The U.S. SEC, when considering whether to approve these new ETF products, must respond to political pressure while also addressing the market’s demand for more types of products. If the unified standards promoted by exchanges can be adopted, it could fundamentally change the path for ETF listings and open the door for more products. However, before these standards are truly implemented, each new application still faces a complex compliance evaluation, and the market cannot rule out the possibility of delays or even rejections.

Two ETF applications from Truth Social are still under review, and it will take a considerable amount of time before a decision is made. The SEC is currently taking a cautious approach in reviewing multi-asset ETFs, and it is uncertain whether they will be approved quickly in the short term. However, this round of applications responds to the upcoming discussion on general listing standards and reflects that encryption ETFs are transitioning from pilot programs to a broader product stage. Once the regulatory path is clarified, market competition will intensify rapidly.

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