Next Significant Crypto Coin: Faraday's C10 ETF Plans

The cryptocurrency frontier has captured the attention of traditional corporations looking to diversify their portfolios and capitalize on digital asset developments. Faraday Future Intelligent Electric Inc. is a publicly traded electric vehicle company on Nasdaq that had initially come to the public's attention with its grand ambitions of entering the crypto world, veering off course but nonetheless continuing its efforts through the C10 strategy. By adopting the C10 strategy, Faraday's efforts would position the company to potentially become the next big crypto coin through its treasury structure and ETF plans, where the trail of assets goes through the treasury holdings. The C10 Index and Treasury product are designed to create the optimal structured way to gain exposure to the top cryptocurrencies, directly attracting institutional investors looking for ways to allocate capital and comply with institutional digital asset investment protocols. Faraday continues to trend within crypto by meeting a set of characteristics which include, corporate supportive exposure to crypto investment, absolutely unique, with micro-cap weighted indexing to expose investors to a balanced risk profile. Anywhere else you could think to go find the next biggest crypto coin, this active search paired with Faraday's future is interesting because of its portfolio company's take on being involved in digital assets in some sort of treasury spin-off, following in the footsteps of corporations, like MicroStrategy, who presently hold digital assets in their corporate treasury. There appears to be wider digital asset support across the company today, as evidenced in part by Faraday's plan to potentially spin off into a separate company its crypto assets (i.e., it's trading shells may include tokenized representations or coins for their value in respect to the treasury). Using such a strategy would expose an investor indirectly, meaning on their own, to crypto, which will most certainly mitigate manage volatility concern. The next BIG crypto coin may emerge from the tokenized treasury shares or a utility token supporting the broader transaction system of "Faraday." Again, this denotes the budding development of broader interest unbelievably in a new market and perhaps exciting planning to build off the direct crypto markets, like Faraday's announcements, that have begun to yield stock price increases post any announcement period, with accompanying active blog discourses regarding the bigger "what if" of yet to be seen.

After considering Faraday's plan, there are a few things to consider for interested investors:

  • Investigate the company's balance sheet - since treasury plans depend on access to funding to purchase assets.
  • Analyze similar corporate crypto projects to help approximate returns.
  • Follow regulatory filings for details on the spin-off and timing of ETF approvals.
  • Structure exposure by combining with established crypto indices, to help with risk management.

These factors can help guide your assessment of the opportunity.

Faraday Future and the Crypto Markets

Faraday Future, who has been focused on electric vehicles and is considering a pivot to cryptocurrency, officially launched the "EAI + Crypto" dual flywheel strategy in August 2025. This plan indicates a strategic transition toward combining artificial intelligence with cryptocurrency to build multiple growth engines that sync together. This transition includes the C10 plans, specifically the C10 Index, which is a market-capitalization weighted index that tracks the top 10 cryptocurrency assets, excluding stablecoins. The C10 Index launched at a base value of 1,000 and will recalibrate as crypto markets move every month. The C10 Index limits the weight of any single underlying currency to no more than 50% of the index, which prevents over-concentration of capital.

Faraday is doing much more than diversifying however, instead, it is attempting to channel market volatility into the treasury. Faraday has plans to allocate up to and as much as $1 billion into crypto assets; subject to financing, it could become one of the largest public corporate assets in the industry. The greatest coin tokenization to emerge from a treasury could be enabling retail investors with a process to benefit from institutional-grade treasury investment strategies SEC reporting obligations, that will increase readability, transparency to the offering that is less common with pure crypto projects. When investing after Faraday is trading in the market, consider taking the following actionable steps:

  1. You want to monitor the index performance on (FF.com) for its assessment of the management of the asset selection process.
  2. You can evaluate against other corporate treasuries for relative value.
  3. You should begin to monitor alerts than could escalate treasury investments and financing announcements.
  4. You should include it as a portfolio in a larger portfolio structured up a portion of your larger portfolio with 10-20% in the mix focused on crypto projects corporate back. All of the steps above would follow the objective requirements of the strategy.

Regulatory Focus on Faraday's Crypto Strategy

Faraday's crypto strategy is focused on compliance and generationally operates under U.S. securities law public company initial plans was focused on operating in compliance with the U.S. securities laws as a public company. Faraday out lined plans for the spin-off project to operate as its own publicly traded company, and follow the avenues of the disclosure rules. This would be a very important in the C10 ETF plans, because the company would have to obtain regulatory approval to offer tracking exchange-traded shares based on the treasury performance. Faraday to structure treasury product as an 80% passive portfolio and 20 active product will offer standards for investment products, and could eventually count as ETF.

Faraday has a regulatory focus meaning Faraday has higher level of levels of conviction as compared to a nonregulated project and lowers the risk for the investor who would be wary about investing in the space without regulation. Treasury management is through independent manager Qualigen Therapeutics, which further cement a level of oversight.

If anyone further desires clarity about regulations for treasury management as an option for corporate asset management under an ETF, the SEC investment company act of 1940 as open for discussion would allow it provides a clearer view of the requirements for exchange traded products area.

Explaining the C10 Treasury Product

The C10 Treasury is the leader of Faraday's product line in its crypto efforts, established to hold a diversified basket of leading coins based off the C10 Index. The C10 has a targeted initial allocation of around $500 million to $1 billion. The treasury adopts a hybrid abnormal model consisting of about 80% of the treasury specifically designed to passive mirror the index to support stability, while the remaining 20% is actively managed as new investment opportunities arise. The thrust of this sliding management approach is compounding through staking and yield farming of top coins, with low volatility and better than expected yields to fund Faraday's business vertical. 

The structure of the treasury includes compliant custody solutions with multi-stacked wallet security solutions designed to maintain custody and protect assets over say a single-signed wallet. It will feature an $30+ million in treasury purchases up front as the intention is to easily deploy more as other financing is secured. This product could be the way the next large crypto coin is created, perhaps as token shares that will trade online. Investors will have very specific exposure to crypto without managing the investments directly and will accrue value from allocation strategy led by professional managers. The treasury is structured to hold top coins that significantly bring down risk predictability in performance compared a single asset exposure, while the active investments search for alpha from market timing. 

In order to understand the treasury from operations perspective, the following metrics below will fully explain the operations:

  • Monthly rebalancing on the assets to stay in line with index.
  • Yield enhancement from staking eligible assets.
  • Downside managed from potential hedging in the active portion.
  • Periodic reporting of the value of assets as well as C10 treasury performance metrics.

These include operation transparency in managing the assets.

Allocation of Active vs Passive in C10 Treasury

For the C10 Treasury, the allocation's active vs passive management, represent a balanced trade off between risk and reward. The 80% passive allocation that tracks the C10 Index, will allow the treasury to buy into the best performing/most broadly held solution with little impact to this exposure. The index's cap on individual assets is beneficial to the strategy's ability to avoid overexposure to high volatility coins, like Bitcoin, which can be tough.

The 20% active allocation will allow for tactical moves, such as adding to the small, undervalued position, or hedging in downward moving markets. This is expected to attract returns in sideways markets, and is because passive strategies tend to lag in sideways markets. The active layer will combine correlation trades as well as liquidity management processes meaningfully from traditional portfolios repurposed to the crypto space. This degree of separation should also appeal to clients looking for something more than passive index tracking.  This layer is anticipated to provide a differential in value relative to the benchmark during increasing volatility markets where the degree of differentiation exists.

Regarding the allocation, we can sort through some facilitated measures in the process of evaluating other products utilizing the increasingly popular framework:

  1. Investing Risk: Passive tracking error you want to be as close to the index as KPI
  2. Active Manager: Technology history for alpha
  3. Size: Total expense ratios including custody and the fees of most (not all) others
  4. Performance: historical performance data over different cycles

Those above measures would better assist in establishing product evaluation performance information.

Faraday Spin-off Strategy for Crypto Assets:

Faraday Future announced today, in September of 2025, they have plans to spin-off their crypto flywheel assets and liabilities into a stand-alone public company. Expect value creation for shareholders. The crypto flywheel will include the company's C10 Treasury and initiatives, and allow the company to focus on value creation out of their crypto efforts while avoiding harmful overlap within a principally EV company.  There are plans for the spin-off to become a public company with a ticker name of CXC10, and to seek to become one of three largest public companies in the USA focused on crypto treasury management as a component of an ongoing and growing professional industry. 

The separation of companies will clearly be of value to stakeholders within the crypto and EV industries. This part of the strategy should alleviate any perception of misalignment in interests exemplified in Faraday's automotive focus. Overall, the rationale of separating the two companies in focus will allow for clarity and value development to occur unobstructed and unharmed by what were real underlying values contained in creating two companies with real and developing value. Initially, the spin-off is expected to stay under Faraday's control with an eye towards autonomy. This new company would develop into the next great crypto coin using a token or shares to offer exposure to the bitcoin treasury's growth. This is on the heels of a $41 million investment in $QLGN (Qualigen Therapeutics) which manages the treasury. This signals an intention to commit to the crypto pivot.

If you are thinking about the spin-off ramifications, prepare by doing the following:

  • Read Faraday's SEC filings about details of the transaction and timelines.
  • Determine the governance structure of the new entity and whether there will remain independence from Faraday.
  • Estimate potential distributions of equity to existing shareholders.
  • Observe the market reaction to a crypto spin-off to assess significant valuation.

Taking these actions will facilitate readiness.

Governance Structure of the Spin-Off Entity

The new spin-off will likely adopt a governance structure similar to that of Faraday as compliant to the regulatory framework, with a board of directors overseeing the governance of the crypto related business. In establishing a board, the protocols for accountability can be assessed through voting thresholds on all material decisions including any distributions of revenue from the treasury. Moreover, given the emphasis on trading on the U.S. markets, regulatory compliance would need to be maintained as consistent with formal or informal company obligations to trade on the NASDAQ or another regulated exchange. Quarterly financial reports will be used to maintain transparency - again it would be essential to create a compliant reporting structure as a responsible steward of investor assets and as a bridge between traditional finance and crypto.

Governance structure will also adopt oversight of the treasury through various audit committees, risk committees, or other professional oversight, means to provide further assurance that investor assets are at some very basic level of professionalism and accountability when the new entity enters the market. As mentioned previously, the NASDAQ has various corporate governance guidelines on the requirements for companies to list share prices or distributed equity stakes.C10 ETF Structure and Approval Process

Faraday's plans for C10 ETFs would offer an exchange-traded product designed to track the C10 Treasury price index, hence providing an indirect token or digital currency exposure, as regulated shares in the United States will be used. This will be traded on stock exchanges, with the ETF either holding treasury unit or tokenized asset units. This could help to attract investors wanting asset exposure indirectly via a product that investors are for more familiar with than a direct investment into a digital currency. Especially, these products could potentially open access to mutual funds and retirement accounts.

The SEC (Securities and Exchange Commission) review and approval process would involve a filing under Regulation A or S-1, which would need to clearly and concisely describe to the SEC the mechanism of the ETF product, and the potential risks for the investors in the ETF. Faraday's structure is in part advantageous of already being publicly traded and this can help shorten the process. But the fact that the underlying project is digital currency could raise scrutiny, especially since digital currency is also regarded as extremely volatile.

The speculation of growing demand for crypto ETFs after the approvals of the Bitcoin spot ETF products is evident in Faraday's plans for the C10 ETF. If successful, this can be the next big thing to equivalent to a crypto coin becoming an ETF, with the shares traded as stocks being backed by digital assets.

For tracking up to the approval process, I will provide four different methods:

  1. Search the EDGAR data base for Faraday's ETF proposal filings.
  2. Subscribe to SEC alerts for cryptocurrency approvals.
  3. Find ETF structures that are similar from other ETF providers like Grayscale.
  4. Talk to your financial advisor regarding the implication of purchasing this type of product and how this could affect the rest of your portfolio.

This will help keep you aware of the approval process.

Risks in Crypto-backed ETFs

Crypto-backed ETFs like the C10 ETF would have risk from the volatility of the assets in the fund. Substantial price decreases for the assets can lead to decreases in the share price for the ETF. Risks can also arise with the SEC creating uncertainty with potential delays with approvals from filing and assessments with classification. Potential liquidity risk could occur if the underlying asset is subject to freezingThe diversification in the C10 basket addresses these risk factors, but investors will want to assess their own risk tolerance. Further details on the risks associated with exchange-traded funds (ETFs) can be found in the SEC's investor bulletin on ETFs, which includes generalized risks that could be applicable to cryptocurrency products.

Expected Returns and Market Positioning

The expected return profile of the C10 ETF is based off of historical returns of cryptocurrency, and the index has been back-tested to generate a return of 1,891% over the last five years. With the assumption the cryptocurrency market cap is $5 trillion in 2025, expected returns of 50-100% annually could be achieved under bullish scenarios. By positioning it as a U.S.-listed security, the keyword "domestic" will appeal to the investor base while distinguishing the product from offshore security alternatives. Building a market position using the Faraday brand will elevate trust in the C10 ETF, and the initial target is to raise $500 million in assets under management (AUM). Capturing just 1% of a market estimate for crypto ETFs, at $50 billion, will enable future growth as adoption rises. For the sake of illustrative assumptions, the projections assume a normal scaling in assets under management for a treasury product, and we assume the active management aspect will provide 10-20% alpha.

In prior sections, we mentioned how to calculate your own personal returns:

  1. Determine estimated ETF fees based on other similar products currently on the market (for example, 0.5-1%).
  2. Cryptocurrency is expected to grow, therefore model the effect on the expected return assuming the historical CAGR 70%.
  3. Consider the effect of active allocation providing alpha over passive investment.
  4. Consider the expected share price premiums that are anticipated in times of greater demand.

This is not an exhaustive list, but we will use these recommendations to estimate, and if you follow along you can join in the forecast.

Comparison with Competing Crypto ETFs

When compared to the approved Bitcoin ETFs of BlackRock, the C10 is more than a single asset and provides comparative exposure to several assets, which as a result can reduce volatility. When compared to the trust structure of Grayscale and its multi-coin trust, the C10 would be the active component in the ETF, which would allow a shift on a trading day, thus providing a chance for greater returns in volatile markets. Expected fees are set to be at 0.75%, which is competitive with what ARK could offer. When looking at C10 against these investments, it positions C10 in the indexed treasuries segment, which is appealing to those investors who want as balanced an approach as possible. The corporate backing of C10 provides an additional layer of security absent in the crypto ETFS, which could help deliver outsized growth. For a comparison of ETF risk and costs, ETF.com is a solid resource; you simply will need to find comparable crypto products.

Investor Portfolio Strategies for Faraday's Crypto Venture

Investor portfolio strategies with Faraday's crypto venture will focus on an allocation to the spin-off company for exposure, and allocations should be about 10-15% of the portfolio for moderate risk. Investors can purchase Faraday stock even prior to the spinoff and receive stock in the new company or simply wait for Faraday's ETF to be launched to become a passive investor. The next big crypto coin element implies you should keep your eyes out for tokens linked to treasury holdings as they are issued.

In many ways you will want to hedge against volatility by adding short positions in Bitcoin futures. You will also want to diversify your holdings with other corporate crypto plays. For guidance on strategy, see Fidelity's guide on how to invest in crypto that can be applied to treasury products.

Follow these steps to help develop a strategic approach:

  1. Determine your risk tolerance in the allocation decisions.
  2. Monitor the purchases of treasury assets to develop your trackers.
  3. Use technical analysis to time when to add the stock of Faraday.
  4. Rebalance your holdings based on movement in crypto across period intervals (every quarter).

These steps will help you refine your portfolio and approach.

Portfolio Integration with C10 Exposure

The 5 to 10 percent allocation of C10 and other crypto could be integrated into existing or new portfolios for those conservative investors while the direct holdings of the treasury can remain balanced with bonds. As the aggressiveness increases, you may want to go to 20 percent of the allocation on C10, paired with direct crypto exposure. The integration to the portfolio ensures C10's diversification reduces overall risk exposure.

Tips to Integrate:

  • Use appropriate allocation of holdings in gold hedge against inflation.
  • Constantly rebalance your crypto holdings using automatic tools.
  • Monitor the correlation of the investment as it is dependent on stock markets.
  • If approved ETF is available, consider using it in you IRA based accounts, even if just temporarily.

As listed, these are tips to integrate a new exposure.

Conclusion

Faraday's plan to start C10 ETFs represents a bold new direction, arguably changing corporate finance, potentially being the next big coin of the crypto universe through a tokenized access through treasury holdings. The strategy of regulatory/compliance framework combined with diversified holdings addresses both questions of investor concerns, and a method for structured crypto exposure. As the spinoff comes to fruition, it will unlock some meaningful value, bringing along a new wave of participants to the sector.

This exhibit represents gaps between relatively normative industries, as even EV companies like Faraday, believe that the growth engine will derive from cryptocurrency and blockchain solutions to electrification and/or being eco-friendly. While there are still inherent risks involved, and they do exist, the expected sustainable returns warrant consideration. As a practical note, investors should remain as updated as possible on new approvals and forward performance.

Generally, Faraday's plan is not only a worthwhile origin in evolving strategies in corporate finance with crypto-derived instruments, it could potentially set the stage for others to come.  The plans for C10's provide perspectives on indexes, tracking and modestly managed fund that allocates best in growth with exposure to crypto.

Read more here: https://www.diigo.com/item/note/bm0ae/5ga9?k=fe832f4ffa9a5989f8ef6b0d83d6a569

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Pub: 30 Oct 2025 09:38 UTC

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