Right time, right place Canary Capital launched the first-ever Litecoin (LTCC) and Hedera (HBR) ETFs, for trading on the Nasdaq in the week from 23rd to 30th October.
These are the first spot crypto ETFs in the US which are not on bitcoin or Ethereum and were launched during the longest US government shutdown.
Steven McClurg, CEO and founder of Canary Capital, explains that his firm is just over one year old and is largely focused on crypto ETPs, McClurg having been founder and chairman at Valkyrie, a business he sold to Coinbase in the UK about a year and a half ago.
“The band is back together again,” says Nashville-based McClurg, as he has built his new business with a team he has worked with over the years who have ‘a pretty deep background in ETFs.’
McClurg, who also runs a long only hedge fund invested in new derivatives that hedges the risk with fixed income, correctly predicted that President Trump would be re-elected last year and that he would come back a little more of a crypto believer.
“In his first presidency he was negative to neutral on crypto but he has turned a page in the last few years,” McClurg says. Canary Capital made four fillings among which were the Litecoin and Hedera offerings.
McClurg says that even prior to the re-election of President Trump, they were getting positive comments on Litecoin and Hedera ETFs, from the Ginsler-run SEC, but the arrival of new chairman Paul Atkins earlier this year saw everything crypto change.
“The new administration got deeper in their comments on the Litecoin and Hedera offerings so by the time the generic listing standards were approved in August they were complete and then when the shutdown happened, we decided to go ahead with a no delay amendment after the SEC put that guidance on their website,” McClurg says. “We are thankful that the shutdown is happening as we are small and agile and able to get ahead of these things. We were the very first ETF to ever file with a no delay amendment in 20 years.”
The response has been extremely positive, he says, having been ‘pleasantly surprised’ by the asset flows of USD70 million in the first three days, significantly over his target of USD25-50 million and hopes of reaching USD100 million by the end of the year.
“We are seeing a strong retail audience,” he says. “Hedera is a unique cryptocurrency in that it very much has its own cult following. It’s not like the other cryptos in the way it was developed and worked. People involved in enterprise software are big fans with a strong network of enterprise companies that they work with.”
McClurg has no concerns about the SEC’s response to these products launched when the shutdown ceases. “It was their guidance on the website and also the exchanges emailed that to their clients.”
Despite the shutdown, SEC chairman Paul Atkins has consistently posted on X in support of crypto.
“We are pretty excited about some of our other ETFs that are lined up,” McClurg says. “We could go live with two more offerings in November and we have about eight other filings for single token ETFs and one with a mix of NFTs.”
The firm has added to its range in mid-November, with its First SPOT XRP ETF (XRPC), writing that this listing has been highly anticipated by institutions and investors as it is pure-play with 100 per cent exposure to XRP in this ETF wrapper.
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