Canary Capital Aims to Launch First Axelar ETF – Institutional Demand Rising?

•  Canary Capital has filed for the first-ever Axelar (AXL) ETF, which aims to expose institutional investors to this cryptocurrency.
•  The ETF’s net asset value (NAV) will be tied to AXL’s price, though key details like the listing exchange and custodian remain unrevealed.  

Investment firm Canary Capital has submitted its filing to the U.S Securities and Exchange Commission (SEC) for an exchange-traded fund (ETF) based on Axelar’s AXL digital currency.

This is the first time any firm has requested an investment fund focused on Axelar. 

Notably, with this bold move, traditional finance companies are becoming more interested in newer types of digital currencies beyond just Bitcoin and Ethereum. If approved, this fund would give everyday investors an easier, more familiar way to invest in this emerging technology.

The SEC will now review the application, though there’s no set timeline for when they might decide to allow this new investment option.

Pioneering Institutional Access to Web3 Interoperability 

The filing, submitted on March 5, outlines that the ETF’s NAV will be calculated based on the price of AXL. While the move signals growing institutional interest in Web3 interoperability solutions, critical details, such as the ETF’s listing exchange, ticker symbol, and custodian, are still private.  

This ETF builds on Canary Capital’s earlier efforts to bring Axelar to institutional investors. On February 19, the firm launched the Canary AXL Trust, its first structured AXL offering. Steven McClurg, CEO of Canary Capitals, stated:   

With Axelar driving some of the most advanced interoperability solutions in Web3, we see in AXL a significant opportunity for institutional investors to gain exposure to the technology underpinning next-generation blockchain connectivity,

Market Reaction and Broader Trends  

The announcement had an immediate impact on the market. AXL’s price surged 14.3% to $0.44, while trading volume skyrocketed by 206% to $43.2 million. 

Canary Capital’s filing is part of a broader wave of cryptocurrency ETF applications in the US. Since Donald Trump took office, the SEC has seen a surge in filings, with over 45 crypto ETF applications currently pending approval.

While Bitcoin (BTC) and Ethereum (ETH) ETFs have dominated the space, the scope has expanded to include unconventional assets like meme coins. For instance, Bitwise and Grayscale have filed for a Dogecoin (DOGE) ETF, while Rex Shares and Tuttle Capital have targeted meme coins like Official Trump (TRUMP) and Melania Meme (MELANIA).  

Challenges Ahead  

Despite the growing interest, significant hurdles remain for non-BTC/ETH ETFs. According to Kaiko Research, many altcoins face issues like shallow liquidity, making them prone to price manipulation and volatility. Additionally, most trading activity for these assets occurs on offshore platforms, raising concerns about transparency and regulatory oversight. 

While approval processes might evolve, market dynamics still need to catch up, Kaiko noted.  

For now, AXL joins a growing list of crypto ETF filings. Whether it succeeds and paves the way for similar offerings remains to be seen.

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