Key Takeaways
- REX Shares and Osprey Funds filed with the SEC for 21 single-asset crypto ETFs, including Cardano, Stellar, Sui, and Hype.
- Many proposed ETFs include staking features, which enable investors to earn blockchain rewards on assets such as ADA, AVAX, DOT, NEAR, SEI, and TAO.
- Bloomberg analyst James Seyffart reacted to the surge of ETF filings, saying, “Things are getting wild,” as the SEC faces a shutdown delay.
REX Shares and Osprey Funds stirred the market by filing the paperwork with the U.S. Securities and Exchange Commission (SEC) for 21 single-token crypto exchange-traded funds. The portfolio of applications is a broad combination of digital assets, such as Cardano (ADA), Stellar (XLM), Sui (SUI), and Hyperliquid (HYPE).
About REX-Osprey’s ADA, XLM, SUI, HYPE & Other Crypto ETFs
The ETFs proposed are not just any vehicles of tracking price. As per the SEC filing, most of the products are designed to have staking, which refers to an arrangement where holders of tokens would lock up their holdings in blockchain networks to earn extra rewards. Cardano, Stellar, Avalanche (AVAX), Polkadot (DOT), NEAR Protocol (NEAR), Sei (SEI), Sui, Bittensor (TAO), and Hyperliquid are some of the assets used in ETFs that are staked.
The introduction of Solana staking ETF by REX-Osprey earlier this year, whose valuation was historic, seems to have provided the two firms with a boost to increase their ETF portfolio. Meanwhile, the companies have also given subtle indications of a Dogecoin product, a disclosure which coincided with a visible rise in the DOGE price in recent weeks.
To manoeuvre the U.S. tax regulations, the ETFs are set up with Cayman Islands subsidiaries that reflect the strategies of the U.S.-based funds. Such a solution allows the issuers to maintain exposure to the digital assets and be regulated investment companies.
The disclosures also show that as much as 40% of the portfolio assets can be invested in the non-U.S. exchange trades products. Examples listed in the documentation are ETPs of 21Shares, CoinShares and Valour, listed on exchanges in Canada and Europe.
Friday was not the only day on which REX Shares and Osprey were the only managers to file. Defiance ETFs LLC too submitted new offerings documents, including leveraged products, not just to cryptocurrencies but to large-cap stocks, including Tesla and Amazon. Bloomberg Intelligence ETF analyst James Seyffart responded to the deluge of submissions on social media, by saying, “Things are getting wild.”
SEC’s Scrutiny of Crypto ETFs
An increasing number of applications have been under evaluation by the SEC to cover various digital assets in an ETF. Some of the proposals have been funded on Litecoin (LTC) and Ripple’s XRP, as well as Dogecoin. Since January when President Donald Trump assumed office, regulatory conditions have changed and this has resulted in issuers pushing harder to get approval.
The new filings are in accordance with the recent ruling by the SEC on granting listing standards by three exchanges. That regulatory change modified the workflow of commodity-based trust shares, which might enable crypto ETFs to bypass the 19b-4 review process, which is lengthy and may speed up time to market.
The U.S. government shutdown which started this week may slow progress despite the increase in filings. Registration statements and reviews of ETF proposals are likely to remain in limbo awaiting a resolution of the funding turmoil by the lawmakers with agency staff being scarce.
Also Read: Bitcoin ETF vs. Ethereum ETF: $241M BTC Inflows Clash With $79M ETH Outflows
