In a bold move that links presidential politics
directly to the cryptocurrency market, Yorkville America Digital, LLC, has partnered with Trump Media & Technology Group (TMTG) to launch a new exchange-traded fund (ETF). TMTG,
the parent company of former President Donald Trump's "free speech" platform Truth Social, has filed an S-1 registration statement with the
U.S. Securities and Exchange Commission (SEC) to create the "Truth Social Crypto Blue Chip ETF."
A Trump-Branded Crypto Basket for Mainstream
Investors
The proposed ETF,
sponsored by Yorkville and structured as a Nevada business trust, intends to
list on NYSE Arca. This initiative marks a significant step for
TMTG, which is majority-owned by Donald Trump and launched Truth Social in February 2022 as an alternative to mainstream
social media platforms after he was banned elsewhere.
The fund aims to
offer investors exposure to a curated basket of leading digital assets.
According to the SEC filing, the ETF's primary holdings will be heavily
weighted towards the two largest cryptocurrencies:
·
Bitcoin (BTC): 70% target allocation
·
Ether (ETH): 15% target allocation
The
remainder will be allocated to a selection of popular altcoins:
·
Solana (SOL): 8%
·
Cronos (CRO): 5%
·
XRP (XRP): 2%
All
assets will be held in custody by Foris DAX Trust Company, LLC, an entity closely associated with the major
crypto platform Crypto.com, signaling an established and experienced custodian.
Structure, Fees, and Risks
The ETF will operate
similarly to existing crypto funds, where shares are issued and redeemed in
large blocks known as "Baskets" of 10,000 shares by authorized
broker-dealers. Initially, these creations and redemptions will be cash-based
transactions with its affiliated liquidity provider, Foris DAX, Inc., pending regulatory approval for in-kind (direct
crypto) transactions—a model that has become the standard for U.S. spot Bitcoin ETFs.
The fund's only
recurring fee is the Sponsor's Fee, set at an annualized percentage of the Net
Asset Value (NAV), which will cover most administrative costs. The filing also
discloses significant risks inherent to the cryptocurrency market, including extreme price volatility, regulatory uncertainty, operational threats like
hacking, and the potential for certain assets to be classified as securities by
the SEC.
Notably, the trust is currently prohibited from
earning staking rewards on its holdings and will forfeit any assets
resulting from forks or airdrops—a common practice for regulated crypto funds in
the U.S. to avoid regulatory complexities. The filing also claims it qualifies
as an "emerging growth company," which reduces certain public
reporting burdens.
Anchorage Digital Bank NA is named as the cash
custodian, while CF Benchmarks Ltd. will provide the daily pricing rates. The fund
plans to rebalance quarterly to maintain its target allocations.
The SEC must declare the registration effective before
sales can commence, but the filing alone marks a significant strategic move,
creating a financial product that directly ties the Truth Social ecosystem and the powerful Donald Trump brand to the burgeoning crypto investment landscape.
Is a Trump-branded crypto ETF a brilliant
marketing move or a risky political gamble? And would you invest in a fund with
this specific asset allocation? 🤔
Share this article to discuss the growing fusion
of politics and crypto finance! 📲💬
