Trump Media Group continues to apply for encryption ETFs, US SEC promotes unified standards and simplifies approval process

Trump Media & Technology Group has recently submitted two S-1 registration statements for crypto asset ETFs to the U.S. Securities and Exchange Commission (SEC). The group's Truth Social platform is advancing spot ETFs for Bitcoin and Ethereum, as well as a composite "Crypto Blue Chip ETF" consisting of five major crypto assets.

On July 2nd, according to an announcement from Trump Media & Technology Group, it filed initial S-1 registration statements with the SEC for the Truth Social Bitcoin and Ethereum ETF. This ETF will directly hold Bitcoin and Ethereum, with 75% of its assets invested in Bitcoin and 25% in Ethereum, and will issue shares to investors. The ETF aims to closely track the spot prices of the two crypto assets, takes the form of an open-ended trust, and is planned to be listed on the New York Stock Exchange.

Shortly thereafter, on July 8th, the group submitted another S-1 document to apply for the "Truth Social Crypto Blue Chip ETF". The assets of the Truth Social Crypto Blue Chip ETF Trust will mainly include Bitcoin, Ethereum, Solana (SOL), Ripple (XRP), and Cronos (CRO), held by a custodian on behalf of the trust. According to the provisions of the trust agreement, the percentage of the trust's assets allocated to portfolio assets (allocation ratio) is initially expected to be approximately 70% Bitcoin, 15% Ethereum, 8% SOL, 5% CRO, and 2% XRP.

These two applications are in the early stages of the SEC review process, but the assets involved are all major cryptocurrencies with high market capitalization. The market is currently observing whether the SEC will relax its attitude towards multi-asset crypto ETFs after approving Bitcoin and Ethereum ETFs. The asset distribution proposed by Truth Social is relatively conservative, which may have certain adaptability in the current regulatory climate.

The SEC is brewing a unified listing standard for crypto ETFs

Meanwhile, the U.S. SEC is in discussions with major exchanges about a universal listing standard for crypto ETFs. According to a report by The Block, exchanges hope to obtain a clearly recognized listing framework to skip the lengthy 19b-4 application process. Under the current mechanism, each crypto ETF needs to submit an individual approval application, with the longest approval period reaching 240 days. Exchanges are promoting a plan where, if an ETF product meets standard conditions, it can be directly listed for trading without requiring the SEC to vote on each one individually.

The standard discussions involve quantitative indicators such as market capitalization, liquidity, and network distribution. These discussions are still in the early stages, but some insiders at the SEC believe that the mechanism may launch a test by this fall. This move is believed to simplify the application process, shorten the listing time, and improve transparency. Bloomberg analyst James Seyffart said that once the standards are introduced, the market will see a wave of concentrated applications for crypto ETF products, and multiple currencies including Solana, XRP, and Dogecoin may be approved in the short term.

Truth Social's entry point comes at this transitional stage. The product declaration does not emphasize technical highlights nor introduce complex derivative mechanisms. Both ETFs adopt the traditional open-ended trust form, similar to the approved spot Bitcoin ETFs. The difference is that the blue-chip ETF includes more currencies, involving weight allocation between assets. In the current absence of a unified review mechanism, it is unclear whether the fund can be regarded as a "qualified product".

Motivations behind political statements and market environment

Since the Trump administration took office, there has been a significant increase in statements regarding crypto assets. In March of this year, Trump first stated on Truth Social, "America's cryptocurrency reserves will boost this crucial industry, which has been subjected to corrupt attacks by the Biden administration for years. That's why my digital asset executive order instructs the Presidential Working Group to advance crypto strategic reserves including XRP, SOL, and ADA. I will ensure that the United States becomes the world's cryptocurrency capital. We are making America great again!"

Subsequently, the executive order signed by Trump disclosed that it will include two parts: crypto strategic reserves and inventories. Among them, the strategic reserve will only include BTC (the digital asset with the largest store of value), using approximately 200,000 tokens that the government has obtained through criminal and civil forfeitures over the years. The other is a digital asset inventory containing assets other than Bitcoin, which may include XRP, ADA, ETH, SOL, and possibly other assets. The main difference between reserves and inventories is that the government will not actively seek ways to purchase more inventory assets. The government will only explore the use of government funds (if they can find a budget-neutral way to do so) to purchase BTC. The Secretary of the Treasury may determine responsible management strategies, including possible sales of assets from the U.S. digital asset inventory. This has aroused external attention to its policy direction.

In May, according to Politico, Trump's previous post on Truth Social supporting the inclusion of XRP, SOL, and ADA in crypto strategic reserves was actually promoted by a lobbyist from Ballard Partners, and Trump himself was unaware of it. The relevant lobbyists have been "expelled" from the White House. According to three insiders, minutes after the president posted, David Sacks, the White House's "cryptocurrency czar," was furious and called Wells to complain. After the posts about cryptocurrency came to light, Ballard was temporarily excluded from the White House because White House staff were instructed not to meet with him. However, five people close to Trump said that the dissatisfaction with Ballard went far beyond that. Some White House officials believe that Ballard is using Trump's reputation to make profits, boasting that his relationship with the president and Wells is far less close than advertised. The White House declined to comment.

Despite the controversy caused by the incident, Trump has reiterated on multiple occasions that the crypto industry is a key focus for future growth. According to a survey conducted by Deutsche Bank in June, U.S. consumers are the largest users of cryptocurrencies, mainly men and young, wealthy people. In May, the adoption rate of cryptocurrencies in the United States was 17%, higher than 11% in the United Kingdom and 10% in the European Union. Among the 18-34 age group in the United States, the adoption rate of cryptocurrencies rose from 24% in January to 29% in June. Analysts point out that this is mainly due to the market's optimistic sentiment towards the prospects of Trump's crypto-supportive policies. Among U.S. respondents, wealthy people account for 32% of cryptocurrency adopters. In addition, 23% of U.S. men said they use cryptocurrencies for payments or personal investments, compared with 13% of women. Male consumers generally believe that they have a deeper understanding of cryptocurrencies than women.

Truth Social's submission of ETF applications at this time is hard to decouple from the political environment. The compliance and business logic of the ETF products still need to be reviewed, but their political symbolic significance is already in place. As a platform and product carrier, Truth Social has room for further commercialization. However, some voices in the market are reserved about the actual influence of the product. About 30% of the assets in the blue-chip ETF come from tokens other than Bitcoin, and these assets have relatively limited liquidity and market stability. In particular, CRO and XRP have significant price fluctuations and regulatory controversies, and there are still differences on whether they are suitable as underlying assets for publicly traded funds. The SEC has strict requirements on asset security, custody arrangements, and valuation mechanisms when reviewing spot ETFs.

Investors are also evaluating whether these products can maintain long-term attractiveness. Currently, there are more than 10 spot Bitcoin ETFs trading in the market, most of which are held by asset management giants. Truth Social lacks operational experience in the financial field, and how to establish market share is a practical problem. In addition, operational elements such as fund fees, liquidity support, and market maker cooperation have not yet been clarified, which may also affect its market performance.

The window between regulatory advancement and market expansion

When deciding whether to approve these new ETF products, the U.S. SEC must not only deal with political pressure but also respond to the market's call for more product types. If the unified standards promoted by exchanges are adopted, it may fundamentally change the path for ETF listings and open the door for more products. However, before the standards are truly implemented, each new application still needs to face complex compliance evaluations, and the market cannot rule out the possibility of delays or even rejections.

Truth Social's two ETF applications are still under review, and there is a long time before the approval results. The SEC is still reviewing multi-asset ETFs with a cautious attitude, and it is uncertain whether they can be approved quickly in the short term. However, this round of applications echoes the upcoming discussions on universal listing standards, reflecting that crypto ETFs are moving from pilot projects to a broader product stage. Once the regulatory path is clear, market competition will intensify rapidly.

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