Canary Capital, a leading asset manager, recently submitted an S-1 registration statement to the US Securities and Exchange Commission (SEC) for the launch of an exchange-traded fund (ETF) linked to Axelar (AXL), the proprietary cryptocurrency fueling the Axelar Network. This groundbreaking move paves the way for AXL's adoption among institutional investors.
The filing, made on March 5, reveals that the ETF's net asset value (NAV) will be tied to AXL's price. Details such as the listing exchange, ticker symbol, and custodian are yet to be disclosed.
This initiative builds on Canary Capital's prior introduction of Axelar to institutional investors through the Canary AXL Trust, launched on February 19. The ETF filing marks a further step in expanding the accessibility of AXL to this investor segment.
Steven McClurg, CEO of Canary Capital, emphasized the immense potential for institutional investors to engage with the cutting-edge blockchain interoperability solutions offered by Axelar. Following the news of the filing, AXL experienced a 14.3% price surge, reaching $0.44, accompanied by a significant rise in trading volume to $35.7 million, reflecting a 131.8% increase from the previous day. AXL currently holds a market capitalization of $405.5 million, ranking at 174 on CoinGecko.
The move by Canary Capital aligns with a broader trend of increasing cryptocurrency ETF applications in the US, notably accelerated during the tenure of former President Donald Trump. The landscape has expanded to encompass diverse assets, including meme coins, with notable filings for Dogecoin (DOGE) ETFs by Bitwise and Grayscale, and others featuring meme coins such as Official Trump (TRUMP) and Melania Meme (MELANIA).
However, challenges such as liquidity issues, price manipulation risks, and regulatory concerns are prevalent for non-Bitcoin (BTC) and Ethereum (ETH) ETFs, as highlighted by Kaiko Research. The sector's dependence on offshore trading platforms, limited USD trading pairs for valuation accuracy, and the absence of regulated futures markets for many cryptocurrencies pose barriers to wider ETF inclusion.
While AXL joins the array of crypto ETF filings, the ultimate success of these ventures remains uncertain, with market dynamics needing to catch up with regulatory developments. The potential of AXL, alongside similar ETFs, awaits validation in the evolving landscape of digital asset investments.