Launch of the First US Dogecoin ETF
The first US Dogecoin (DOGE) exchange-traded fund (ETF) is set to debut on Thursday, sparking a division of opinions within the industry. Some view it as a significant stride for the legitimacy of the crypto community, while others regard it merely as speculation under a new guise.
Unlike Bitcoin ETFs that have been approved under the Securities Act of 1933, the Rex-Osprey Dogecoin ETF (DOJE) received its green light under the Investment Company Act of 1940, a framework typically associated with mutual funds and diversified ETFs.
For instance, BlackRock’s spot crypto fund merely holds Bitcoin (BTC) in custody at Coinbase. In contrast, DOJE obtains exposure through a subsidiary based in the Cayman Islands and derivatives, as the 1940 act mandates diversification and limits concentration in a single asset.
Industry Reactions to the ETF
Debuts of crypto ETFs are traditionally celebrated within the industry; however, some critics argue that a memecoin fund legitimizes speculation, especially since investors could sidestep fees by purchasing Dogecoin directly. Additionally, there is irony in the fact that Dogecoin, initially conceived as a joke, has surpassed projects with more concrete use cases to reach the ETF market.
Dogecoin traces its origins to Bitcoin, having been created in 2013 as a fork of Luckycoin, which itself is a fork of Litecoin, which is a fork of Bitcoin. Though it started as humorous, it has now evolved into a top-10 cryptocurrency by market capitalization.
Dogecoin has long been favored by retail traders and has also inspired the broader memecoin category, which often faces criticism for its casino-like characteristics. This background makes the approval for an ETF particularly contentious.
The Perspective of Financial Experts
An ETF enables investors to gain exposure to Dogecoin via the stock market, though not everyone finds this beneficial. “These ETFs are charging off-the-charts fees when you could simply create a Coinbase account in five minutes, buy the token and never be charged an expense ratio,” Brian Huang, co-founder and CEO of crypto management platform Glider said.
He further mentioned that institutional investors are more inclined to focus on “legitimate” and revenue-generating tokens.
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Dogecoin’s Economic Dynamics
Throughout its history, Dogecoin has transformed some crypto investors into millionaires; however, its price consistently grapples with inflation. The tokenomics of Dogecoin were designed as a satire of Bitcoin’s scarcity. Unlike Bitcoin’s cap of 21 million coins, Dogecoin features an unlimited supply and issues a 10,000-DOGE block reward every minute, resulting in approximately 5 billion new coins minted annually.
During previous memecoin surges, analysts warned that such assets could divert capital and attention from more serious blockchain initiatives. Some view the ETF as exacerbating that issue.
“It’s wild to see a memecoin front-run serious projects to the ETF finish line,” remarked Douglas Colkitt, a founding contributor at layer-1 blockchain Fogo, in a conversation.
Regulatory Landscape and ETF Decisions
As of late August, 92 crypto ETPs were awaiting SEC decisions from the Securities and Exchange Commission in the US. Among these were Dogecoin products, alongside other memecoin applications like Pengu, the token associated with the non-fungible token (NFT) brand Pudgy Penguins.
“Dogecoin may have started as a joke, but it’s become a serious altcoin that’s attracted real investors and engineers into the space,” said Mike Maloney, CEO and founder of Incyt. “Community engagement is just as significant for a coin as it is for a stock.”
While critics like Colkitt have voiced their displeasure over a memecoin leading the way ahead of more serious contenders, others argue that its success is indicative of the dynamics within the crypto community. Maja Vujinovic, CEO of Digital Assets at FG Nexus, told that Dogecoin leapfrogging other altcoins illustrates how communities can drive assets into regulated frameworks.
“If DOGE is first, it’s less about technical roadmaps and more about recognizing that communities themselves can push assets into regulated frameworks. That’s an important signal that regulators are responding to social momentum as much as to market cap,” she explained.
Public Interest and Market Resilience
Unlike many altcoins, Dogecoin has frequently been in the media limelight. In 2021, tweets from Tesla CEO Elon Musk propelled its price upwards, and even a US government department he once led was humorously referred to as the Department of Government Efficiency, or DOGE. The token has also survived multiple bear markets, showcasing a degree of resilience and maturity that other memecoins often lack.
“The ETF pathway won’t be a free-for-all; liquidity, surveillance, and custody readiness still set the bar. However, more tokens will find their way into regulated structures, which will enhance adoption,” Vujinovic added.
On Tuesday, the SEC postponed its decision regarding the Bitwise Dogecoin ETF, extending the review period until November 12.
The Debate Over Speculation
A Dogecoin ETF compels the industry to wrestle with the question of whether speculation and culture are integral components of the package. Skeptics believe the new fund veers too heavily toward the latter. For Huang, the concept of wrapping a single token in an ETF is “ridiculous,” akin to packaging an individual stock as a diversified product. He argues that the Wall Street packaging merely institutionalizes a meme while imposing fees on investors that they could simply bypass by purchasing DOGE directly.
Others contend that form is just as important as function. Vujinovic emphasizes that an ETF does not modify Dogecoin’s code or purpose, but it introduces elements such as custody, audits, and disclosure requirements that lend legitimacy for mainstream investors.
Colkitt perceives the development as both promise and parody. If a memecoin can enter into a regulated ETF, then “anything is on the table.” This scenario could facilitate adoption but also underscores how crypto continues to blur the distinction between groundbreaking financial innovation and mere entertainment.
In this manner, DOJE does not determine whether memes have a rightful place in serious markets, but it indicates that both regulators and investors are willing to treat them as if they do.
Future Prospects for Memecoin ETFs
Rex-Osprey has additional memecoin ETFs in the pipeline, with SEC filings outlining products connected to Official Trump (TRUMP) and Bonk (BONK), alongside altcoins XRP (XRP) and Solana (SOL).
