Trump Media Seeks SEC Approval for First BTC-ETH Hybrid Spot ETF

On June 16, 2025, Trump Media & Technology Group (NASDAQ: DJT)—operator of Truth Social and related fintech products—submitted an S‑1 registration with the SEC to launch a spot Bitcoin and Ethereum ETF, to be listed on NYSE Arca. The ETF is structured with 75% allocated to Bitcoin and 25% to Ethereum, holding the underlying assets directly in custody without leverage. Crypto.com’s Foris DAX Trust will serve as the exclusive custodian, liquidity provider, and prime execution agent.

Basket creation follows a typical authorized participant (AP) model: exchanges generate blocks of 10,000 shares by delivering the requisite crypto into custody. The fund will rebalance quarterly to maintain its 3:1 BTC/ETH ratio.

Market Background and Strategic Positioning

Bitcoin and Ethereum remain the two most liquid and dominant crypto assets. As of mid‑June 2025, BTC trades around $107–109k, with ETH near $2.6–2.7k, reflecting a 30‑day rally of +5–7% thanks in part to ETF momentum.

Previously approved spot Bitcoin ETFs surpassed US $131 billion AUM, and newly launched Ethereum ETFs are gaining traction. With its dual‑asset model, Trump Media is aiming to differentiate in an overcrowded ETF landscape populated by heavyweights like BlackRock, Grayscale, Fidelity, and Franklin Templeton.

Appetite Estimation and Revenue Projection

We applied a bottom-up model to estimate the prospective ETF’s scale:

• If the fund attracts just 1% of total BTC ETF AUM (~$1.31 billion) and ETH assets in proportion, total AUM would reach ≈$1.64 billion.
• Assuming a fee of 0.10%, annual revenues would be around $1.6 million; a fee closer to the market-permitting 0.08% could muzzle revenue to ~$1.3 million, but may boost inflows.

Moreover, the dual‑asset approach increases basis risk: correlation between BTC and ETH (~0.6–0.7) implies potential divergence, particularly under market stress. The necessity of quarterly rebalancing introduces execution slippage, especially during volatile periods when liquidity can evaporate, creating potential for temporary price distortion.

Standing Out in a Saturated Space

ETF market saturation is high: BlackRock’s iShares Bitcoin ETF alone holds over $70 billion in BTC AUM. To differentiate, Trump Media must consider:

• Fee optimization: near zero fees could drive retail adoption, but profitability dips.
• Brand and distribution channel: integrated into Truth Social or Truth.Fi, leveraging social reach.
• Technical innovation: optional staking of ETH to generate yield, though this introduces protocol-level risk.

Retail marketing via Truth Social may provide a captive audience, though its overlap with financial audiences remains uncertain.

Regulatory and Market Implications

The SEC review process, including the Form 19b‑4 from NYSE Arca, is expected to conclude by late 2025, barring objections. An SEC attuned to institutional crypto normalization—especially post-11 spot BTC ETF approvals and recent ETH ETF approvals—could view the filing as a continuation of that trend.

The addition of Ethereum broadens the ETF’s market depth, aligning with growing institutional demand for multi-asset exposure amid DeFi expansion and Ethereum 2.0 staking dynamics.

Strengths and Strategic Considerations

Diversification vs. Inertia
The 75/25 BTC-ETH split allows investors to capture both store-of-value and utility token narratives in one vehicle, potentially smoothing portfolio volatility. However, traditional investors may prefer separate exposure to rotate holdings based on macro drivers.

Flow Predictability and Arbitrage Opportunity
Quarterly rebalancing creates forecastable flows. Sophisticated participants could arbitrage the rebalancing window unless the ETF incorporates TWAP/VWAP algorithms and multi-source liquidity access.

Regulatory Oversight
The filing discloses potential conflicts—for example, shared sponsors with existing Trump-related crypto operations. The fund must assure regulator confidence via transaction surveillance, third-party audits, and independent governance.

Ethics-Free Focus on Financial Merit
To appeal to institutional channels, the branding should emphasize fiduciary responsibility, transparency, and asset integrity—not political alignment.

Forward-Looking Scenarios

• Optimistic Case: Approval by Q4 2025 with a fee below 0.12%, capturing 1.5–2% of BTC ETF AUM, generating $2–3 million annual revenue—becomes a niche yet credible entrant.
• Base Case: Secures 1% AUM, revenue ~$1.5 million, struggle to differentiate but makes strategic inroads into retail market.
• Downside: Faces SEC delay/change requirement, higher fees, leading to limited adoption, or fails if operational compliance gaps emerge.

A Measured Eye Towards Innovation

Trump Media’s dual‑asset ETF filing is more than a PR headline—it is a calculated step into mainstream finance. Its success will depend on execution discipline, cost efficiency, and how confidently it handles rebalancing mechanisms and custodial transparency. With ~$131 billion already in spot BTC ETFs, and growing institutional interest in ETH, adding a spot BTC/ETH product seems rational—but is hardly revolutionary. Still, for investors seeking diversified crypto exposure via a single, regulated vehicle, this ETF fills a real niche. Analysts will watch:

• Fee announcements and revenue models.
• SEC review outcomes and timeline.
• Custody audits and third-party verification.

This ETF represents the intersection of crypto momentum, regulatory normalization, and innovative asset structuring. Whether it charts a new path or blends into the growing ETF field depends on its ability to deliver market integrity, cost-effectiveness, and operational excellence.