Dogecoin, a meme-based cryptocurrency created on a lark more than a decade ago, is now available to investors through the US public market.
On September 18, investment fund management firms REX Financial and Osprey Funds jointly launched a dogecoin exchange-traded fund (ETF). The launch marks the first time that US investors are able to bet on memecoins—which serve no purpose and promise no utility—through a traditional brokerage, without handling crypto directly.
ETFs are designed to track the price of an underlying asset—whether metals, gold, or crypto. Loosely, for every dollar invested in an ETF, the operator stockpiles a dollar’s worth of the asset, earning a fee as a percentage of the fund’s total value.
“If you ignore stablecoins, dogecoin is the sixth largest [cryptocurrency] by market cap in the world,” Greg King, CEO and founder of REX and Osprey tells WIRED. “It’s really just following the demand that’s already out there in the native crypto space and providing access via a regulated vehicle.”
The extent of that demand is evident: With a first-day trading volume of almost $18 million, the dogecoin fund performed better on debut than many other ETFs launched in the US this year, according to James Seyffart, ETF research analyst at Bloomberg. “People obviously want to trade it,” says Seyffart.
But it’s less clear whether the arrival of memecoin ETFs is a net positive for the investing public. The purpose of capital markets is to create a more efficient means of funding endeavors likely to return value to society, some analysts contend, and memecoins promise nothing of the sort.
“I still don’t really understand why a memecoin should be in an ETF wrapper to begin with,” says Bryan Armour, director of ETF and passive strategies research for North America at investment research firm Morningstar. “Something started as a joke with a Shiba Inu as its character—why should that be a part of capital markets?”
Before regulators at the Securities and Exchange Commission approved the first US-listed bitcoin ETFs in January 2024—only after the courts had forced the agency’s hand—members of the crypto industry had fought for more than a decade for permission to package coins into funds.
However, since Donald Trump returned to the White House, the US government has taken a far more permissive stance towards crypto, instructing prosecutors to deprioritize certain crypto-related offences, passing crypto-specific legislation, and appointing a crypto czar to oversee policy strategy. The SEC, for its part, has retreated from numerous lawsuits against high-profile crypto firms.
The dogecoin ETF launch last week coincided with the release of a new ruleset by the SEC that will allow issuers to bring crypto-based ETFs to market without seeking specific permission on a case-by-case basis.
“By approving these generic listing standards, we are ensuring that our capital markets remain the best place in the world to engage in the cutting-edge innovation of digital assets,” said SEC chair Paul Atkins. “This approval helps to maximize investor choice and foster innovation by streamlining the listing process and reducing barriers to access digital asset products within America’s trusted capital markets.”