The approval of the first spot Bitcoin and Ether exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC) last year was hailed as a pivotal moment in the evolution of the crypto industry. It quickly became obvious that these crypto-based products were to become a major success, with spot BTC ETFs collectively attracting inflows of over $37 Billion during their debut year, significantly above initial estimations.
As expected, the rapid adoption that these instruments experienced in such a short period of time didn’t just influence market dynamics but also sparked discussions about what cryptocurrencies might be approved for spot ETFs next. With Bitcoin and Ethereum already incorporated into these funds, it stands to reason that other crypto assets might soon join them.
The line-up of candidates includes assets like Solana, XRP, Litecoin, Dogecoin and Cardano, as several asset managers, such as Grayscale and Bitwise have already filed applications with the SEC to launch spot ETFs linked to these altcoins. Recently, Tron has also joined the waiting list, giving rise to further speculations on the topic. This has prompted experts to cast predictions on the Tron price and how a potential approval might impact it.
The TRX ETF proposal
The proposal for launching the first-ever US-based ETF tracking the live price of Tron (TRX) came from digital asset and crypto fund management company Canary Capital. The organization submitted an application with the SEC on 18th of April. According to the filing, the fund, called the Canary Staked TRX ETF, will resort to third-party providers CoinDesk for pricing data and BitGo Trust Company for custody services.
As mentioned in its name, the fund also plans on including a staking feature. This would allow the issuer to stake a part of its TRX holdings and thus provide investors with the opportunity to earn rewards generated by this mechanism.
Although the Tron filing has received a lot of attention, it’s important to note that this is not the only crypto ETF product that Canary Capital seeks to launch in the US. The asset manager has filed applications for several crypto-based ETFs with the SEC, looking to take advantage of the opportunities created by the onset of a friendlier crypto climate in the country.
Canary Capital seems determined to expand its range of crypto-related services, submitting applications for ETFs tied to Solana (SOL), XRP, Sui (SUI), Pudgy Penguins (PENGU), and Hedera (HBAR).
Quick intro into Tron
Since a spot TRX ETF might be just around the corner, it’s worth finding out more about the asset it’s going to hold.
TRX is the native crypto of the TRON blockchain and was established in 2017 by Justin Sun. Initially, Tron was an Ethereum-based ERC-20 token and transitioned to its proprietary blockchain in 2018. The Tron network served as a decentralized content distribution platform, but later expanded its functions, integrating smart contracts, stablecoin issuance, and decentralized application (dApp) capabilities, and being supported by a delegated proof-of-stake (DPoS) consensus protocol.
In 2021, Tron became a fully decentralized project, being governed by a decentralized autonomous organization (DAO). Today, Tron is one of the most popular blockchain platforms available, with a user base exceeding 100 million and a registered total of over 3.4 billion transactions. One of its most noteworthy achievements is hosting the largest circulating supply of USD Tether (USDT) stablecoins.
Other features that make Tron stand out in the market is the minimal or inexistent transactions fees – through the Gas Free service – and the ability to process 2000 transactions per second, which make it an attractive option for stablecoin holders.
The TRX token currently ranks 10th in the crypto market, with a trade price of $0.276825 and market cap of $26.26B at press time.
Chances of approval
With applications for spot crypto ETFs related to different altcoins coming from all sides lately, market insiders are naturally wondering about the odds of a spot Tron ETF receiving the stamp of approval from the SEC. Experts seem to be rather optimistic in this regard,
The launch of spot Bitcoin and Ether ETFs gives reasons to believe that the approval of other altcoin-based spot ETFs is not such a far-fetched prospect. The proposal also comes at a very opportune time, when the winds of change are sweeping across the US crypto landscape.
US regulators appear to be much more lenient these days with regard to digital assets than they were under the Biden administration, when the crypto crackdown started, catching many companies in the crosshairs, with enforcement measures and lawsuits piling up against them. With Trump’s return to the White House and the departure of Chair Gary Gensler, the SEC has been shifting its position on crypto, moving from regulation by enforcement to proactive rulemaking.
As a result, the commission decided to put an end to several high-profile lawsuits against major names in the crypto industry, such as Ripple and Coinbase. Under the new administration, the agency’s focus falls on developing more comprehensive and clear regulations for crypto assets that could lay the groundwork for a more supportive environment that promotes collaboration and innovation.
On the other hand, Tron is not the only asset waiting to get the green light for spot ETFs, and it’s certainly not the largest. Solana and Ripple are both in a much better position than Tron and, therefore, are more likely to obtain a positive response.
Moreover, the inclusion of the staking feature might also pose an obstacle for receiving consent, as the SEC has previously been reluctant to allow such features in ETFs.
Final thoughts
In anticipation of SEC’s response to Canary Capital’s application for a spot TRX ETF, we can only conclude that the growing institutional interest in crypto products represents a sign of market maturation, bringing more legitimacy to the industry and highlighting prospects for further growth.
