Several firms recently began seeking approval to create U.S. exchange-traded funds that track cryptocurrencies beyond the already-approved bitcoin (BTC) and ether (ETH) products. Those applications will probably go nowhere if Democratic Presidential nominee Kamala Harris wins the election in November, according to two ETF experts.
The approval of spot bitcoin and ether ETFs earlier this year was seen as a huge win for the industry after issuers fought for years to introduce such funds. One issuer, Grayscale, even sued the U.S. Securities and Exchange Commission to overcome the regulator’s rejection – and won. Billions of dollars have poured into the new ETFs.
Since then, issuers have been taking stabs at the next big crypto ETF launch, with applications currently in process for a fund tracking Ripple’s XRP (XRP) token and the native cryptocurrency of the Solana blockchain, SOL (SOL).
“It won’t happen if Harris wins, regardless of the issuer,” said Eric Balchunas, senior ETF analyst at Bloomberg Intelligence.
Some industry experts believed that when asset management giant BlackRock joined the race to list bitcoin and ether ETFs, that significantly improved the chances the SEC would approve them – though it’s unclear how big a factor BlackRock actually played.
If former President Donald Trump wins the election, however, there’d be a “decent chance” for more crypto ETFs, regardless of whether BlackRock joins Bitwise, VanEck and others that want to expand crypto ETFs beyond bitcoin and Ethereum’s ether, according to Balchunas.
Nate Geraci, president of the ETF Store, echoes this outlook. “It seems highly unlikely that a Harris administration would approve additional spot crypto ETFs, at least not anytime soon after the election,” he said.
Seeing how current President Joe Biden’s administration has approached crypto, which Geraci characterized as “combative, overall,” and taking into account Harris’ powerful position in that administration, it is fair to assume that the status quo would continue under her leadership, according to Geraci.
Trump’s odds of winning the election have surged to 62.4%, the highest in months, according to prices on the leading prediction market, Polymarket.
The former president has won support from the crypto community in recent months after taking a favorable stance toward the industry. He appeared at a prominent Bitcoin conference, endorsed a DeFi platform and visited a Bitcoin bar in New York ever since making crypto support a big part of his campaign.
Harris, on the other hand, has been much less vocal about the sector and has only recently unveiled plans to establish a regulatory framework for cryptocurrency and digital assets, which she aimed toward Black men, who her campaign noted are more likely to own crypto. However, details on how she’d support crypto are still scarce.
In conclusion, the future of crypto ETFs beyond bitcoin and ether may depend on the outcome of the U.S. presidential election. With Harris unlikely to approve additional spot crypto ETFs and Trump showing more support for the industry, the landscape could shift significantly based on who wins in November. Investors and industry players will be closely watching the election results to see how the regulatory environment for cryptocurrencies may evolve in the coming years.
