Canary Capital Trump Coin ETF Bid Raises Doubts

Despite trading around $8.46 and being the 55th largest crypto by market cap, the token has plummeted since its January peak. Analysts, including Bloomberg’s Eric Balchunas and ETF Store president Nate Geraci, raised concerns about the ETF’s unconventional regulatory path, with some calling it a “regulatory end-around.” REX Financial CEO Greg King also warned issuers to be more selective when backing assets as most tokens beyond the top 20 are unreliable.

Trump Coin ETF Risks Under Fire

President Donald Trump’s meme coin could soon be the subject of an exchange-traded fund (ETF) in the United States after Canary Capital filed to launch the Canary Trump Coin ETF. The proposed product will directly hold and provide exposure to the Official Trump token, which is currently trading around $8.46. 

Trump launched the coin in January, just days before returning to the White House. However, the token has since lost close to 70% of its value since reaching its Jan. 19 all-time high of $46.50. Despite its drop in value, it still ranks as the 55th largest crypto by market capitalization.

TRUMP’s price action since launch (Source: CoinMarketCap)

The filing stirred some controversy already, not only because of the token’s political connections and potential conflicts of interest, but also due to questions over its regulatory path. Bloomberg ETF analyst Eric Balchunas pointed out that ETFs typically require a futures product to have traded on an exchange for at least six months, something Trump’s token lacks. He suggested the fund could instead be structured under the Investment Company Act of 1940, an approach that has been used before to sidestep traditional ETF hurdles. REX Shares, which already filed for a Trump token ETF using this framework, described the strategy as a “regulatory end-around.”

Despite this, people in the industry are stillI cautious. ETF Store president Nate Geraci also talked about the unconventional regulatory path, while REX Financial CEO Greg King warned issuers to carefully consider which cryptocurrencies they back. Canary itself acknowledged the risks in its filing, and warned that the Trump coin ETF may not be suitable for investors unwilling to accept high levels of speculation.

The fund’s legal entity was registered in Delaware on Aug. 14, which was the first formal step toward bringing the Trump coin ETF to market.

ETF Issuers Must Be Selective

REX Financial CEO Greg King urged ETF issuers to be very cautious about which digital assets they choose to back, and warned that large parts of the market are still unreliable. Speaking to Bloomberg’s ETF IQ, King said, “Crypto gets pretty sketchy below the top 10, certainly below the top 20,” adding that issuers need to be more selective in order to avoid exposing investors to risky or illiquid tokens. 

His comments were made as issuers are flooding regulators with applications for new cryptocurrency ETFs after the success of spot Bitcoin products.

King argued that while there won’t be a “huge explosion” in ETF filings across every cryptocurrency, the industry will likely see “a lot of funds per coin,” which means that multiple issuers will compete to launch the same products for the most in-demand assets. This trend is already evident with Bitcoin and Ethereum ETFs and is now spreading to Solana, where issuers are rushing to secure regulatory approval. 

REX itself is awaiting clearance for ETFs tied to meme coins like Bonk, the Official Trump token, and Dogecoin. DOGE is the tenth-largest cryptocurrency by market capitalization, but others in the meme coin category face questions about their long-term sustainability and intrinsic value.

Despite the risks, King singled out Solana as an overlooked blockchain with strong potential, particularly in the stablecoin sector. While Ethereum has been the dominant platform for stablecoins, he suggested this was “a huge oversight,” and said that Solana’s speed and high processing capacity make it a natural fit for stablecoin adoption. King described Solana as a likely rival to Ethereum, though he acknowledged his view was “controversial” and might divide opinion in the industry. He also pointed to Solana’s larger staking rewards compared to Ethereum as an attractive feature for both investors and ETF structures.

The growing focus on Solana is proved by the fact that nine issuers—including VanEck, Bitwise, Grayscale, 21Shares, CoinShares, Canary Capital, Franklin Templeton, Fidelity, and a joint effort from Invesco and Galaxy Digital—have filed to launch spot Solana ETFs. The SEC is expected to approve them by October. 

Analysts predict near certainty that the funds will move forward. If cleared, these ETFs could be the start of the next wave of mainstream investment products in the US crypto market.