Canary Capital is looking to launch a new financial instrument, the Canary American-Made Crypto ETF, and has filed the necessary paperwork with the US Securities and Exchange Commission (SEC).
A document submitted on August 25 indicates that this proposed spot fund will focus its investments on digital currencies with significant ties to the United States. This includes crypto assets originally developed in the US, digital tokens that are primarily created or mined within the country, and blockchain networks that conduct the majority of their business operations within the United States.
The ETF’s aim is to track the performance of the Made-in-America Blockchain Index, which is a collection of eligible assets.
According to the official filing, the trust intends to mirror the returns of this index, while also generating supplemental income. This additional income will come from participating in network validation activities, such as staking or the process of confirming transactions on the blockchain.
While the document doesn’t specify which particular cryptocurrencies will be included, available market data offers insight into the fund’s potential scope.
CoinGecko estimates that crypto assets originating from the US represent a total market capitalization exceeding $520 billion. Projects frequently mentioned in this category include XRP, Solana, Cardano, Chainlink, Stellar, Avalanche, Hedera, and Sui.
Commenting on this latest trend, Eric Balchunas, an ETF analyst at Bloomberg, suggested that this filing demonstrates the ongoing efforts of fund managers to explore every conceivable way to provide investors with access to the burgeoning crypto market.
He remarked:
“As we’ve predicted, get ready for ETFs to try every combination imaginable.”
Avalanche ETF
Canary Capital’s application arrives during a period of significant activity in the crypto fund application space.
In a related development, Grayscale Investments has formally requested that the SEC allow them to transform their existing Avalanche Fund into an exchange-traded trust. If approved, this investment vehicle would be listed on the Nasdaq stock exchange under the name Grayscale Avalanche Trust ETF.
This product would grant investors exposure to Avalanche’s AVAX token without necessitating direct ownership or management. Coinbase is slated to serve as the fund’s custodian and also handle prime brokerage duties for the product.
Funds generated from the creation of new shares will be used to purchase AVAX. The trust can then hold these AVAX tokens, convert them into US dollars for covering operating expenses, or distribute them during redemption events. Pending regulatory authorization, the trust may also utilize its AVAX holdings for staking purposes, thereby generating further yield.
Grayscale’s proposed Avalanche ETF joins a growing number of applications for altcoin-focused ETFs that are currently under review by the SEC. Experts in the industry anticipate that the agency will deliver decisions on more prominent applications, including those focusing on Solana and XRP, before the year concludes.