Investor excitement over friendlier regulators

Attitudes on Capitol Hill toward exchange-traded funds and cryptocurrency may be changing. 

Teucrium CEO and CIO Sal Gilbertie told CNBC’s “ETF Edge” regulators are becoming “more friendly” under President Donald Trump versus the Biden administration.

“It’s a completely different environment in Washington right now,” Gilbertie said on Monday. “It’s more welcoming towards innovation — especially in crypto… and that’s a relief for us.”

Gilbertie’s firm oversees the Teucrium 2x Long Daily XRP ETF (XXRP), which aims to return double the daily performance of the cryptocurrency XRP, according to the fund’s website. As of Tuesday’s close, the ETF is up 96% since its April 7 launch.

Gilbertie said Teucrium’s role in pitching funds has not changed, but the reception from regulators has.

“The steps that we take to list the fund are the same, but there’s no animosity anymore,” Gilbertie said. “We’re not feeling like they’re antagonistic, that they’re looking for a problem, that they’re looking to actually go against whatever it is you’re trying to do.”

With discussion of regulating newer market players, like ETFs and crypto, Gilbertie said investors need to be savvy and “understand what they’re owning” as new products enter the playing field.

“The U.S. markets are the safest markets in the world for a reason, because we have tight and very thorough regulations,” he said. “But I think investors always need to be learning.”

The Teucrium 2x Long Daily XRP ETF is geared toward investors with a high risk tolerance. In a news release this month, the firm noted the ETF “carries distinct risks” due to its use of leverage and warned it may not be suitable for all investors.

Investment Company Institute CEO Eric Pan is also encouraged by what he sees in Washington — particularly when it comes to the Securities and Exchange Commission engaging with industry players. He thinks cryptocurrency regulation discussions are in the early stages.

“They’re [regulators] very interested in hearing the views of groups like mine at the ICI. They want to talk to member firms. They want to understand what they’re seeing in the marketplace,” said Pan in the same interview, adding that this is a “really positive step.”

The process of rolling out crypto-related ETF products is not much different from ETFs containing traditional stocks, bonds and commodities, Pan said. In both cases, he said regulatory certainty is important to mitigate risk for firms and investors, but he also wants to see room for innovation.

“We like the idea that, through competition, firms [and] our members can come up with new products, try them out, see if there’s an interest in them,” Pan said. “That’s really what we’ve been advocating for, both on Capitol Hill and with the SEC.”

The excitement comes just weeks after President Trump signed the GENIUS Act, a law regulating stablecoins. Stablecoins are a type of cryptocurrency that’s pegged to a fiat currency, like the U.S. dollar. The legislation marks a major legislative win for cryptocurrency and furthers Trump’s goal to make the U.S. the “crypto capital of the world.”