In a surprising turn of events, the newly launched XRP and Dogecoin exchange-traded funds (ETFs) have seen massive trading volumes in just the first few hours of their debut. The REX-Osprey XRP ETF, carrying the ticker XRPR, managed to achieve an impressive $24 million in trading volume shortly after going live, far exceeding initial expectations. In a notable statement, Bloomberg Intelligence analyst Eric Balchunas remarked on the rapid success, noting that this opening volume was five times greater than any XRP futures ETFs on their first day of trading.
Conversely, the REX-Osprey Dogecoin ETF, marked as DOJE, also defied its forecasts by generating over $6 million in its initial hour. Balchunas had suggested a more modest $2.5 million benchmark for DOJE, calling it a “respectable target,” only to witness the actual figures shatter those predictions. His response highlighted the ETF’s astonishing performance, indicating the unexpected enthusiasm from traders.
Both funds were launched under the 40-Act framework, which imposes stricter limitations compared to Bitcoin ETFs, presenting a unique regulatory structure that allows for quicker launches. This method enables issuers to bypass the lengthier approval process typically required by the U.S. Securities and Exchange Commission (SEC) under the 1933 Securities Act. However, these ETFs come with tighter marketing restrictions and less robust distribution capabilities compared to their Bitcoin and Ethereum counterparts, which received SEC approval the previous year.
Despite being classified as high-risk assets, Dogecoin and XRP are making waves in the institutional investment landscape. Dogecoin, often dismissed as a joke currency, is now wrapped in an ETF structure charging a 1.5% annual fee—considerably more than the fees associated with leading Bitcoin ETFs. Balchunas even suggested that Dogecoin’s entry into the ETF space represents a unique milestone, being perhaps the first U.S. ETF to invest in an asset intentionally designed “to have no utility.”
Meanwhile, XRP is making its mark with its highest-profile U.S. listing to date, following protracted legal challenges with the SEC. The excitement surrounding these launches reflects broader regulatory shifts in the U.S. crypto market after recent political changes. Following the election victory of President Donald Trump last year, the regulatory landscape saw significant transformations, including the resignation of Gary Gensler, a known crypto skeptic, from his role as SEC chair. Paul Atkins, an advocate for pro-crypto policies, has since taken over and is fostering a more supportive regulatory environment.
The sudden launches of these ETFs have ignited discussions about the potential for more crypto funds to enter the market. The SEC is reportedly preparing to unveil “generic listing standards” that could streamline the process for other cryptocurrency ETFs, signaling a possible surge of unconventional financial products. Analysts believe that these developments could open the floodgates for various new investment opportunities in the crypto space.
However, the enthusiasm isn’t universal. Critics, including Bryan Armour from Morningstar, express concerns about the implications of normalizing collectibles like Dogecoin as investment vehicles. He likened the phenomenon to fleeting trends, drawing parallels to fads such as beanie babies or collectible baseball cards. This sentiment adds a layer of caution amidst what appears to be a rapidly evolving investment landscape in the cryptocurrency arena.
