The Cryptocurrency Industry Is Bracing for a Potential Surge in Exchange-traded Funds (ETFs) After Donald Trump's Election Win

Market participants are hopeful that a pro-crypto Trump administration will end regulatory gridlock and usher in broader approval for innovative crypto-based financial products.

The cryptocurrency industry is preparing for a potential surge in exchange-traded funds (ETFs) following Donald Trump's successful bid for the presidency, a development that experts believe could herald a transformative era for digital assets in the United States.

According to a report by the Financial Times, market participants are optimistic that a pro-crypto Trump administration will end regulatory gridlock and pave the way for broader approval of innovative crypto-based financial products.

The recent approval of spot Bitcoin and Ethereum ETFs by the Securities and Exchange Commission (SEC) marked a significant milestone after years of regulatory pushback.

However, filings for ETFs tied to other digital assets like Solana (SOL), Ripple (XRP), and Litecoin (LTC) have yet to gain traction.

In comparison, Europe has been more receptive, offering exchange-traded products linked to around 30 cryptocurrencies, according to ETFbook data.

Industry leaders are hopeful that Trump's administration will replace SEC Chair Gary Gensler, whose tenure has been marked by strict enforcement actions against the crypto industry.

Trump has also pledged to make the U.S. a "bitcoin superpower," further fueling optimism for more supportive policies.

"This election was a massive win for crypto," said Matt Hougan, Chief Investment Officer of Bitwise Asset Management, which filed for an XRP ETF.

"For the past four years, crypto has operated with major regulatory uncertainty. Imagine what happens when those headwinds are removed."

These sentiments were echoed by VanEck's head of digital asset research, Matt Sigel, who described the election as a turning point for the crypto industry.

"The SEC's regulation by enforcement approach under Gensler stifled innovation. A return to a disclosure-based system could pave the way for more digital asset ETFs," Sigel noted.

He anticipates a Solana ETF to be trading in the U.S. by the end of next year.

Asset managers are now preparing for what could be a flood of new crypto products. VanEck, buoyed by Trump's victory, has renewed its focus on developing digital asset ETFs.

Meanwhile, Canary Capital recently filed for an HBAR ETF, adding to its existing applications for Solana, XRP, and Litecoin ETFs.

The market rally following Trump's election has highlighted the pent-up demand for crypto innovation. Solana, XRP, and similar tokens have surged by 30% since the results, reflecting optimism for more favorable regulation and the potential approval of exotic crypto ETFs.

In Europe, digital asset ETFs offer a diverse range of products, with nearly 30% of the $13 billion market dedicated to basket products and offerings beyond Bitcoin (BTC) and Ethereum (ETH).

If mirrored in the U.S., these more specialized products could see demand reaching $55 billion, based on ETFbook's projections.

Townsend Lansing, head of product at CoinShares, Europe's largest provider of digital asset ETFs, sees regulatory clarity as crucial for U.S. market growth.

"A comprehensive legislative regime alongside traditional securities laws is completely missing in the U.S.," Lansing stated.

He argued for a nuanced approach to regulating cryptocurrencies as commodities or securities, an issue that has been contentious under Gensler's SEC.

While optimism abounds, industry leaders caution that regulatory clarity should not devolve into a "free-for-all." Hougan emphasized the need for balanced oversight, saying, "We want a dialogue-driven approach, not regulatory chaos."

The potential regime change could reposition the U.S. as a global hub for digital assets. Sigel highlighted that over the past four years, the SEC's actions pushed much of the innovation abroad.

"We're looking forward to the U.S. reclaiming its position as a leader in product development, from ETFs to stablecoins and NFT platforms," he added.

The impact of these developments will be explored in depth at Benzinga's Future of Digital Assets event on Nov. 19, where industry experts will discuss the evolving landscape of crypto regulation and innovation.