The launch of the first exchange-traded fund (ETF) focused on a meme coin, the Rex Shares-Osprey Dogecoin ETF (DOJE), is anticipated to take place this week after experiencing numerous delays and significant speculation. Initially set to debut last week alongside several politically themed and cryptocurrency-related ETFs—including those linked to Bonk, XRP, Bitcoin, and a Trump-themed fund—DOJE’s introduction did not materialize as expected.
Bloomberg ETF analysts Eric Balchunas and James Seyffart have indicated that a Wednesday launch is now the most plausible scenario, with Seyffart stating, “It’s more likely than not,” although he acknowledges that certainty is elusive. In the run-up to the ETF’s introduction, Dogecoin (DOGE) has shown impressive performance, rising 15% over the past month, despite a recent drop of 3.5% in the last 24 hours.
If launched, DOJE would be a landmark product as the first U.S. ETF specifically targeting a meme coin. Meme coins, characterized by their often minimal utility or economic purpose, include cryptocurrencies like Dogecoin, Shiba Inu, and Bonk. Their value typically stems from internet culture, celebrity endorsements, and speculative trading, rather than from any intrinsic worth. Balchunas underscored the fund’s importance, remarking that it represents the “first-ever US ETF to hold something that has no utility on purpose.”
It is crucial to note that DOJE is not a spot ETF, meaning it will not hold DOGE directly. Instead, the fund will utilize a subsidiary based in the Cayman Islands to gain exposure through futures and other derivatives. This structure allows it to avoid the complexities associated with physical custody of the coin, while still enabling traders to engage with its performance via conventional brokerage accounts.
The ETF received approval earlier in the month under the Investment Company Act of 1940, which traditionally governs mutual funds and diversified ETFs. This contrasts with the recent trend of bitcoin ETFs being approved under the Securities Act of 1933—a framework designed for commodity-based and asset-backed offerings. As a result, DOJE is more akin to a mutual fund than a simple commodity trust.
Further developments could be on the horizon, as several firms have submitted applications to launch spot DOGE ETFs that would hold the coin directly instead of relying on derivatives. These applications are currently under review by the U.S. Securities and Exchange Commission (SEC), an agency that has shown increasing receptiveness to crypto ETFs following its endorsement of a series of bitcoin ETFs in early 2024.
The broader cryptocurrency market suggests that investor demand often surpasses fundamental critiques. While meme coins are frequently met with skepticism regarding their lack of underlying value, they continue to attract billions in speculative capital. Seyffart believes the ETF market may follow a similar trajectory, stating, “There’s going to be a bunch of products like this, whether you love it or need it, they’re going to be coming to market.”
He further commented on the nature of existing financial products, many of which exist primarily as vehicles for short-term bets. “There’s plenty of products out there that are just being used as gambling or short-term trading,” he said, suggesting that if a market exists for meme coins in the crypto sphere, it is reasonable to expect the same in the ETF and traditional finance worlds.
The market’s response to the potential launch of the DOJE ETF could determine whether it paves the way for additional meme coin funds or simply validates the concept’s viability. Regardless, its impending arrival marks a new chapter in the intersection of internet culture and traditional financial markets.
