Canary Capital’s ETF Plans Came Together, Thanks to Trump.

Canary Capital’s Bold Move into Crypto ETFs Driven by Political Shifts

Canary Capital, founded just last October by Steven McClurg, former CEO of Valkyrie Investments, has swiftly positioned itself in the cryptocurrency ETF space. While the company was only recently established, it has made waves by filing multiple applications for crypto-focused exchange-traded funds (ETFs), including ones for Solana (SOL), XRP (XRP), Litecoin (LTC), and Hedera (HBAR), with the Litecoin and Hedera filings being the first of their kind in the market.

From the outside, it may have appeared that Canary had meticulously planned its foray into the crypto ETF world. However, McClurg shared that the company’s sudden move wasn’t part of the original vision.

“We really had no idea that we would be getting back into the ETF game,” McClurg admitted.

Before launching Canary Capital, McClurg co-founded Valkyrie Investments, where he served as Chief Investment Officer until CoinShares acquired the firm in March 2024. After a brief stint at CoinShares, McClurg set his sights on creating a hedge fund, Canary Capital, an idea he had been mulling over during his tenure at Valkyrie.

The decision to pursue crypto ETFs came amid an unexpected political event. McClurg recalled, “There was an assassination attempt on Trump, the markets rallied, and we started thinking—he could actually win. If that happens, regulatory agencies will likely shift, and we may see more crypto ETFs approved. So why not file some ETFs and see how it plays out?”

Rather than focus on the already-established spot bitcoin and ethereum ETFs, Canary turned its attention to other high-cap cryptocurrencies that, in their view, weren’t likely to be considered securities. The firm ultimately filed for ETFs on LTC, HBAR, and XRP, with the XRP filing speculating that the coin would be classified as a non-security—something that was later confirmed in court.

However, despite the firm’s proactive filings, none of Canary Capital’s ETF applications have been approved yet by the SEC. Under the previous SEC leadership, multiple Solana ETF applications were either denied or left unaddressed. Following Trump’s inauguration, Cboe BZX Exchange resubmitted filings for Solana ETFs, hoping to gain approval from the new administration. The SEC is required to respond to the submissions within 45 days or 240 days if delayed.

Canary has also submitted a 19b-4 form for its Litecoin ETF, which is set for a response by February 29. However, the firm has yet to file 19b-4s for its XRP and HBAR ETFs. These forms are critical for advancing the ETFs, as they notify the SEC of proposed rule changes for self-regulated entities like exchanges.

McClurg reflected on the firm’s approach, saying, “Oddly enough, it worked. We essentially treated it as a call option on Trump winning the presidency.”

Looking to the future, McClurg indicated that Canary Capital does not currently plan to launch additional ETFs but remains open to exploring opportunities with other tokens as market conditions evolve.