Canary Capital Leverages Political Climate to File Multiple Crypto ETF Applications
Launched last October by Steven McClurg, former CEO and founder of Valkyrie Investments, Canary Capital has rapidly made a name for itself in the world of cryptocurrency exchange-traded funds (ETFs). Though the firm was founded after the launch of spot bitcoin and spot ethereum ETFs, Canary quickly filed multiple applications for crypto-related ETFs, including ones for Solana (SOL), XRP (XRP), Litecoin (LTC), and Hedera (HBAR). Notably, the Litecoin and Hedera applications are the first of their kind.
It seemed, at first glance, as though the company had carefully planned its strategy. However, McClurg, the firm’s founder and CEO, admitted that the rapid move into the ETF space wasn’t part of the original plan.
“We really had no idea that we would be getting back into the ETF game,” McClurg confessed.
McClurg is no stranger to the ETF space. He co-founded Valkyrie Investments, where he served as Chief Investment Officer before the company was acquired by CoinShares in March 2024. After a brief stint at CoinShares, McClurg decided to launch Canary Capital as a hedge fund, an idea he had been developing during his time at Valkyrie.
Reflecting on his decision to enter the crypto ETF market, McClurg explained how an unexpected political event influenced the firm’s strategy. “Essentially, there was an assassination attempt on Trump, the markets rallied around it, and we started thinking, well, he could actually win,” he recalled. “If he wins, then there’ll be changes in regulatory agencies, and it’s likely that other crypto ETFs will get approved, so why not file some ETFs and see what happens?”
Given that the spot bitcoin and ethereum ETFs had already been launched and well-received by investors, Canary decided to focus on other tokens further down the list of top 20 market cap cryptocurrencies—specifically those that they believed wouldn’t be classified as securities. Their filings included ETFs for LTC, HBAR, and XRP, the latter being based on the expectation that XRP would be legally recognized as a non-security, which ultimately happened.
Despite the firm’s aggressive filing strategy, none of Canary Capital’s applications have been approved by the U.S. Securities and Exchange Commission (SEC) yet. Under the previous SEC leadership in 2024, multiple Solana ETF filings were either denied or not addressed.
After Trump’s inauguration, however, Cboe BZX Exchange resubmitted documents for Solana ETF approvals, hoping for a favorable response under the new administration. The SEC is obligated to respond within 45 days, or within 240 days if the response is officially delayed.
Canary also submitted a 19b-4 form for its Litecoin ETF, which will require an SEC response by February 29. However, the firm has not yet filed 19b-4s for its XRP and HBAR ETFs. For an ETF to move forward, the SEC must be formally notified of proposed rule changes through the 19b-4 process.
McClurg summed up the strategy behind Canary Capital’s actions: “Oddly enough, it worked. It was essentially a call option on Trump winning the presidency.”
Looking ahead, McClurg noted that Canary Capital currently has no plans to file additional ETF applications. However, he didn’t rule out exploring other tokens in the future as market conditions evolve.
