Rush to File Exotic ETFs Linked to Crypto

Currently there is a rush of filings by fund firms for exotic ETFs (Exchange Traded Funds) that will be linked to will track digital artwork, cryptocurrencies, meme coins in the hope that bored retail investors will be attracted to a more speculative investment in the crypto world. Among the many recent filings by fund managers are ETFs tracking Litecoin and Cardano (these are smaller cryptocurrencies), meme coins* which also include $TRUMP**, dogecoin***, non-fungible tokens****, Pudgy Penguins*****, and companies investing in “reversed engineered” alien technology******.

*Memecoins – these are crypto currencies created to follow trends (often internet trends of cultural phenomena) employ humour and try and build a sense of community to attract users.

**$TRUMP – this is an example of a meme coin associated with the President of the United States, Donald Trump and is hosted on the Solana blockchain.

***Dogecoin – Is considered to be one of the first meme coins based on the Japanese word Kabosu (dog) which was a Shiba Inu dog.  Dogecoin morphed into an open-source, peer-to-peer digital currency and it was initially created as a light-hearted joke in the cryptocurrency space but has evolved into a significant cryptocurrency with a dedicated community. Some experts feel that dogecoin is an ALT coin (alternative coin e.g., not Bitcoin) and as such should not be considered as a meme)

****Non-Fungible Tokens – also known as NFTs are unique digital assets stored on a blockchain acting as a digital certificate and ownership for various items such as digital art, music, videos, domain names, to mention but a few.

*****Pudgy Penguins – are an example of a NFT and are a collection of 8,888 unique digital penguins launched on the Ethereum blockchain in August 2021. Each penguin is a unique digital collectible, generated from a collection of hand-drawn traits.

******Reversed Engineered Alien Technology – this technology refers to the hypothetical process of understanding and replicating extra-terrestrial technology recovered by governments and other organisations. There is apparently no verifiable evidence to support the existence of this technology but some proponents suggest reverse engineering in aerospace and the energy sector. However, Tuttle Capital (Offices in Delaware and Connecticut and has circa USD 681 Million under management) have filed for an Alien Tech” ETF, and therefore there is perhaps more to this technology than meets the eye.

Experts in the crypto arena suggest that since the elevation of Donald Trump to the White House who has also nominated Paul Atkins as Chair of the US Securities and Exchange Commission, such appointments have had a positive effect on money managers and hence the ETF filings on the aforementioned crypto’s. Whilst Donal Trump has indicated his support for the crypto market, analysts suggest that Paul Atkins is much more crypto-friendly than his predecessor Gary Gensler.

Some analysts are ruminating that some fund/asset/money managers are desperate to offer new products to a retail investor base that is becoming bored with the current offerings on display today and want something more exciting and exotic to trade. However, there are many experts who suggest a number of these new filings will have a short life as product development is often well ahead of the investor base interest.