CRO Printer Go BRRRR: Spot Bitcoin ETFs (CRO) Launch Despite Controversial Vote to Remint 70 Billion CRO Tokens

Former Securities and Exchange Commission Chair Gary Gensler famously said, after he approved spot bitcoin ETFs in January 2024, “While we approved the listing and trading of

Former Chair of the U.S. Securities and Exchange Commission Gary Gensler has a stark warning for investors: just because a product is approved by a regulator does not mean it’s a good investment.

Gensler, who famously approved the listing and trading of certain spot bitcoin (BTC) ETP shares in January, made the sobering statement.

“While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin. Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto,” he said.

Now, as the new batch of bitcoin futures ETFs hit the markets, it is a pertinent point. Gensler had many reservations about bitcoin, which he touched upon in the same statement.

“Though we’re merit neutral, I’d note that…bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist financing.”

So, what would he say about an ETF that tracks CRO, the native token of the Cronos blockchain?

Cronos Token Printer Go BRRRR

Crypto.com, the founding firm and controlling entity behind the $9.5 billion blockchain (at fully diluted value), pushed through a controversial vote — against the wishes of its community — to credit the 70 billion CRO tokens that were taken out of circulation back in 2021. The total supply is now back up to its original 100 billion units, with the new tokens placed in a strategic reserve to be released periodically by Cronos Labs in the coming years.

A token undergoing a 233+% inflation rate in a single day, especially one that broke a cardinal rule of crypto — that tokens taken out of circulation can never return — might seem like a tough sell. As is a token that is down 35.94% this year despite a high-profile partnership with Trump Media & Technology Group (NASDAQ:DJT) (“TMTG”) and its partner, Yorkville America, “to support and power a series of TMTG-branded ETFs comprising digital and non-digital assets, including a first of its kind ETF basket of cryptocurrencies incorporating CRO and other crypto assets,” according to a March 24 press release.

The below chart demonstrates a brief price bump around the time of the announcement, but many of those gains were quickly given up.

[Image: Rendering of Trump Tower in New York City. Image used for illustrative purposes only.]

An optimistic take might be that the partnership will generate more interest in Cronos and its native token. However, TMTG’s stock has lost 76.7% since its SPAC merger closed in December 2022. And its partnership with Yorkville America to launch an ETF later this year will be focused on non-digital assets.

This places an emphasis on the role of Harvest, which is the firm that will be applying for the Trump-branded crypto ETF. According to its website, Harvest specializes in fixed-income ETFs, and its largest ETF is the Harvest Total Return Bond ETF (TSX: BOND), which has $1.04 billion in AUM. For perspective, the new bitcoin futures ETFs from ProShares (NYSE:PROPS) and Invesco (NYSE:IVZ) have $1.2 billion and $1 billion, respectively.

186X More Expensive Than Alphabet

On May 6, 21Shares launched an ETP trading on Euronext Paris and Euronext Amsterdam offering exposure to the token for a fee of 2.5%. In the launch’s announcement, which made no mention of the controversial vote, Mandy Chiu, head of financial products development at 21Shares, said, “Cronos is uniquely positioned at the intersection of centralised access and decentralised innovation…By launching a Cronos ETP, we are offering investors easy, regulated exposure to a blockchain ecosystem that is driving real-world adoption and pioneering the future of Web3.”

She did not mention that the blockchain only made $2.05 million in fees last year, according to Token Terminal. This would give it a price-to-sales ratio (P/S) of 1873. And that figure only uses CRO’s circulating market capitalization, not the fully diluted 100 billion figure. By comparison, a tech firm like Alphabet (NASDAQ:GOOGL) had a (P/S) of 7.1 at the end of 2024. And that number comes at a time when Magnificent 7 stocks, which includes Alphabet, were particularly frothy.

When asked for comment about the controversial launch, Chiu responded via written comments:

“We are closely monitoring the recent governance developments. Governance is a critical aspect of any blockchain ecosystem, and different networks take different approaches. We recognise that Cronos operates under a more centralised model, which