Tuttle Capital Files for 10 Crypto-Based Leveraged ETFs, Including Memecoins and Popular Digital Assets

Tuttle Capital has filed for approval of 10 leveraged exchange-traded funds (ETFs) focused on cryptocurrencies, including several for memecoins. The move comes as analysts suggest that these filings are pushing the boundaries of what crypto-friendly regulators, appointed during Donald Trump’s presidency, will allow.

Among the most notable of the proposed ETFs are those focused on Trump-themed memecoins: Official Trump (TRUMP) and Melania Meme (MELANIA) tokens. According to James Seyffart, an ETF analyst at Bloomberg, the funds are leveraged, meaning they aim to deliver two times the return of the tokens’ performance. This is part of Tuttle’s broader strategy, which also includes leveraged funds targeting other popular cryptocurrencies and emerging digital assets.

Some of the other assets in the filing include well-known tokens like XRP, Solana (SOL), Litecoin (LTC), Chainlink (LINK), Cardano (ADA), and Polkadot (DOT), as well as lesser-known but rapidly growing memecoins like Bonk (BONK).

Tuttle’s move to create leveraged ETFs for these assets, many of which currently lack ETFs, raises questions about the regulatory oversight and approval process.

A Test of SEC’s Stance on Crypto and Memecoins

This latest filing marks a test case for the U.S. Securities and Exchange Commission (SEC), especially under the current leadership of Chair Gary Gensler, who has been criticized by some in the crypto space for his tough stance on digital assets. James Seyffart indicated that the filings are likely a strategic move to push the limits of what regulators will allow, particularly regarding memecoins, which have gained massive popularity but remain under scrutiny for their volatility and speculative nature.

The SEC’s crypto task force, headed by Commissioner Hester Peirce, has been viewed as more crypto-friendly, as Peirce has been advocating for clearer rules and more lenient policies for digital assets. Peirce, appointed during the Trump administration, is seen by many as a key figure in shaping the future of crypto regulation in the U.S.

Seyffart suggested that the task force will likely play a central role in deciding the fate of Tuttle’s filings and other crypto-related ETFs. “I’m expecting the new crypto task force led by Hester Peirce to likely be the lynchpin in determining what’s gonna be allowed vs what isn’t,” Seyffart said.

These filings are drawing attention because they are for leveraged ETFs, a class of fund that aims to amplify the returns (or losses) of the underlying asset by a 2:1 ratio or higher. This is in contrast to typical ETFs, which track the underlying asset one-to-one.

Eric Balchunas, a senior ETF analyst at Bloomberg, noted that this type of filing is “unusual” because leveraged ETFs are being proposed for assets that don’t yet have a standard ETF structure. As Balchunas pointed out, “This is a 40-act filing, so in theory, unless the SEC disapproves them, they could be out and trading by April.”

This creates an interesting question: Will the SEC allow such high-risk, leveraged products to be listed for memecoins and less-established tokens? And if so, where will they draw the line for future filings?

The Broader Trend: More Firms Eye Crypto ETFs

Tuttle’s filings are part of a broader trend of financial firms seeking to gain exposure to the burgeoning crypto ETF market. The SEC has already approved Bitcoin and Ether index ETFs from firms like Hashdex and Franklin Templeton in December 2023, and more companies are lining up to launch similar products.

Osprey Funds, for example, has plans to convert its Osprey Bitcoin Trust (OBTC) into a spot Bitcoin ETF, following the termination of its acquisition deal with Bitwise. As of now, there are 32 Bitcoin ETFs listed in the U.S., though only 11 are spot Bitcoin ETFs, which directly hold the asset.

Other firms, like REX Shares, are also filing for memecoin-related products, including ETFs for Dogecoin (DOGE), TRUMP, and BONK. These moves signal that there is increasing demand for crypto-themed ETFs, but they also raise questions about the regulatory landscape and whether these products are appropriate for retail investors.

The SEC’s response to Tuttle’s filings and other leveraged memecoin ETFs will likely be a watershed moment for the future of crypto regulation in the U.S. If approved, these funds could open the door for further experimentation with digital assets in the ETF space, especially as crypto continues to become more mainstream.

Tuttle’s filing of these highly speculative leveraged funds represents a bold step into largely uncharted regulatory territory. It remains to be seen whether the SEC will approve these products, but the decision could have far-reaching implications for the entire crypto ETF market, as well as for how the SEC approaches crypto regulation in the future.

As we move closer to the potential launch of these funds, all eyes will be on the SEC’s final decision and its broader stance on the growing role of memecoins and leveraged ETFs in the world of digital assets.