Why Trump’s bitcoin ETF plans likely collapsed before even getting off the ground

Trump Media & Technology Group likely abandoned plans for its bitcoin BTC$77,950.74 exchange-traded fund (ETF) because the economics no longer worked.

ETF analysts say the company behind Truth Social faced a brutal reality: the spot bitcoin ETF market has become crowded, fees have collapsed and investors already have more than a dozen similar products to choose from.

This week, Trump Media withdrew registration statements with the U.S. Securities and Exchange Commission for the “Truth Social Bitcoin ETF” and “Truth Social Bitcoin & Ethereum ETF,” ending plans to launch the funds.

The company described the move as a “structural reset” designed to help it build the right investment products for investors. But analysts following the ETF market say competitive pressure was the more likely reason.

“The first five Truth Social ETFs have received a lukewarm reception, attracting just over $30 million in combined assets since their launch at the end of 2025,” Nate Geraci, president of NovaDius Wealth Management, told CoinDesk.

“That tepid investor response may have dissuaded the firm from entering a highly competitive category, where it would face some of the world’s largest asset managers and well-established crypto-native ETF issuers,” Geraci said. With spot bitcoin ETF fees already as low as 14 basis points, the Truth Social Bitcoin ETF would likely have been “a dead man walking,” he said.

The fee pressure has intensified in recent months as major Wall Street firms expanded into crypto products. Morgan Stanley recently launched a bitcoin ETF charging 14 basis points, one of the cheapest offerings in the market.

That raised the bar for any new entrant trying to gain traction.

Bloomberg Intelligence ETF analyst James Seyffart questioned Trump Media’s explanation for the withdrawal. On X, Seyffart said the company pointed to differences between products registered under the Securities Act of 1933 and funds structured under the Investment Company Act of 1940.

“But it doesn’t make a ton of sense to me,” Seyffart wrote. “Of course a 33 Act ETP is different from a 40 Act ETF and it has less protections. Anyone in this space knows that. Nothing has changed.”

Instead, Seyffart said he suspects “it more has to do with the competitive landscape for spot bitcoin ETFs.”

He added that Trump Media may still pursue crypto-related funds under a ’40 Act structure, which allows issuers to build more flexible strategies using derivatives, income products or actively managed portfolios.

“I mean do we really need a 14th spot bitcoin ETF?” Seyffart wrote. “But something that can be more differentiated makes sense.”

Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, pointed directly to the fee war.

“My guess: Yorkville guy told Truth ppl after MSBT that they either gotta come in below 14bp fee or you might as well forget it,” Balchunas wrote on X. “No one will buy it, and it could be embarrassing.”

Some crypto observers speculated that the withdrawal may have been linked to political scrutiny of the Trump family’s crypto ventures or to negotiations tied to the CLARITY Act. Seyffart told CoinDesk he does not believe those concerns drove the decision.