Several firms are actively seeking approval to launch U.S. exchange-traded funds (ETFs) that track cryptocurrencies beyond the recently approved Bitcoin (BTC) and Ethereum (ETH) products. However, two ETF experts warn that these applications are unlikely to succeed if Democratic presidential nominee Kamala Harris wins the election in November.
The approval of spot Bitcoin and Ethereum ETFs earlier this year was a significant victory for the industry after years of attempts by issuers to introduce such funds. One notable issuer, Grayscale, even took legal action against the U.S. Securities and Exchange Commission (SEC) and prevailed, resulting in billions of dollars flowing into the new ETFs.
Since this breakthrough, issuers have been pursuing additional crypto ETFs, with applications currently pending for funds tracking Ripple‘s XRP token and the native cryptocurrency of the Solana blockchain, SOL.
Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, stated, “It won’t happen if Harris wins, regardless of the issuer.”
Some industry observers believed that BlackRock’s entry into the race for Bitcoin and Ethereum ETFs significantly increased the likelihood of SEC approval, although the actual impact of BlackRock’s involvement remains unclear.
Conversely, if former President Donald Trump wins the election, Balchunas indicated there would be a “decent chance” for the approval of more crypto ETFs, irrespective of whether BlackRock partners with firms like Bitwise and VanEck, which seek to expand crypto ETFs beyond Bitcoin and Ethereum.
Nate Geraci, president of the ETF Store, shared a similar viewpoint. “It seems highly unlikely that a Harris administration would approve additional spot crypto ETFs, at least not anytime soon after the election,” he said.
Geraci pointed to the current Biden administration’s “combative” stance on cryptocurrency and noted Harris’s influential role within that administration, suggesting a continuation of the status quo under her leadership.
Trump’s chances of winning the election have reportedly risen to 62.4%, the highest in months, according to the leading prediction market, Polymarket. The former president has garnered support from the crypto community in recent months, adopting a favorable stance toward the industry. He has participated in a prominent Bitcoin conference, endorsed a decentralized finance (DeFi) platform, and visited a Bitcoin bar in New York, making crypto advocacy a key component of his campaign.
In contrast, Harris has been less vocal about cryptocurrencies, recently unveiling plans for a regulatory framework targeting digital assets aimed at Black men, a demographic her campaign identified as more likely to own crypto. However, details regarding her support for the sector remain limited.
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