Canary Capital Seeks SEC Approval for First US TRX ETF with 4.5% Staking Yield

Canary Capital, a well-known asset management firm, has submitted an application to the U.S. Securities and Exchange Commission (SEC) for a new exchange-traded fund (ETF) focused on Tron's native token, TRX. This ETF, if approved, would be the first of its kind in the United States, offering investors a unique way to gain exposure to the TRX token while also benefiting from staking rewards. The proposed ETF aims to hold and stake TRX tokens, which currently offer an annual yield of approximately 4.5%. This feature sets it apart from other cryptocurrency ETFs, which typically do not include staking capabilities in their initial applications.

The filing by Canary Capital comes at a time when there is a growing interest in alternative cryptocurrencies, or "altcoins," and the potential for ETFs to provide a regulated and accessible investment vehicle for these assets. Tron, founded by Justin Sun, is a proof-of-stake blockchain network that has gained significant attention in the cryptocurrency community. The network's native token, TRX, has a total market capitalization of over $22 billion, making it one of the more prominent altcoins in the market.

The proposed ETF by Canary Capital is part of a broader trend of asset managers seeking regulatory approval for cryptocurrency ETFs. However, the inclusion of staking in the initial application is a notable departure from other ETFs that have sought approval for staking only after successfully listing a fund holding the spot token. This move by Canary Capital could potentially pave the way for other asset managers to explore similar strategies, providing investors with more options for earning passive income through staking.

The regulatory landscape for cryptocurrency ETFs in the United States has been evolving, with the SEC acknowledging dozens of filings for proposed crypto investment products since the beginning of the year. These filings include plans for ETFs holding a variety of cryptocurrencies, from native layer-1 tokens like Solana to memecoins. Canary Capital has been particularly active in this space, filing for several proposed US crypto ETFs, including funds holding Litecoin, XRP, Hedera, Axelar, Pengu, and Sui.

Despite the growing interest in cryptocurrency ETFs, some industry analysts remain skeptical about their potential to attract significant assets under management (AUM) and generate profits for issuers. Crypto researcher Alex Krüger, for instance, has expressed doubts about the ability of most crypto ETFs to attract AUM and cost issuers money. However, the unique features of Canary Capital's proposed TRX ETF, such as the inclusion of staking, could potentially address some of these concerns and appeal to a broader range of investors.

The filing by Canary Capital for a TRX ETF with staking capabilities represents a significant development in the cryptocurrency investment landscape. If approved, this ETF could provide investors with a new and innovative way to gain exposure to the TRX token while also earning passive income through staking. The regulatory approval process for cryptocurrency ETFs remains uncertain, but the growing interest in these investment vehicles suggests that they could play an increasingly important role in the future of cryptocurrency investing.