The first DOGE ETF is about to log in to the US stock market. Will the Meme coin ETF era usher in a new era or new risks?

The first DOGE exchange-traded fund (ETF) — Rex-Osprey Doge ETF ( stock code: DOJE) is set to log in to the U.S. market this Thursday. The fund operates under the framework of the Investment Company Act of 1940, which is distinctly different from the Securities Act of 1933 used by Bitcoin ETFs. This opens up new pathways for the ETFization of Meme coins, but also raises discussions about its "intentionally useless" nature.

Unique Regulatory Framework: DOGE ETF under the 1940 Act

The DOGE ETF launched by Rex-Osprey this time has its core highlight in the regulatory framework used:

• Regulatory Basis: The fund was established under the Investment Company Act of 1940, rather than the Securities Act of 1933. This makes it more akin to traditional stock and bond ETFs, rather than a commodity trust like a Bitcoin ETF.
• Investor Protection: Ganesh Mahidhar, an investment expert from Further Ventures, explains that ETFs under the 1940 Act have stricter requirements for diversification and governance, providing more protection for investors.
• Purpose controversy: Bloomberg analyst Eric Balchunas pointed out that this is the first ETF in the United States aimed at holding "intentionally useless" assets, which aligns with Dogecoin's positioning as a Meme coin.

Meme Coin ETF: New Era or New Risk?

The listing of the DOGE ETF has also reignited the debate about the Meme coin asset class:

• The uniqueness of DOGE: Mahidhar believes that DOGE follows the same Proof of Work (PoW) consensus mechanism as Bitcoin, which gives it a basis of "energy consumption" and distinguishes it from other meme coins like Shiba Inu and Pepe that operate on Proof of Stake (PoS), which are more fragile due to their "lack of utility."
• Institutional Attitude: Nevertheless, experts believe that institutional portfolios are "unlikely to engage with these ETFs" at this stage. However, if their market capitalization becomes large enough, they may still attract some attention. Price trends, volatility, and ultimately whether they achieve utility will be key factors determining their future value.

Broader ETF Market Background

The listing of the DOGE ETF comes at a time when the U.S. Securities and Exchange Commission (SEC) is facing over 90 crypto ETF proposals, including pending applications for Solana and XRP funds. Previously, REX Shares had also submitted multiple crypto ETF applications, including those for Trump and BONK. Mahidhar firmly believes that ETFs are a universal "wrapper" for crypto assets, and he sees no reason not to accept such ETFs, as the market is shifting from a cash flow-based value concept to a liquidity-based value concept.

Conclusion

The launch of the DOGE ETF marks an important step in the evolution of crypto ETFs. Incorporating a meme coin into a highly regulated framework challenges traditional perceptions of asset utility and valuation. While its direct appeal to institutions may be limited, this move indicates that traditional finance is becoming more accepting of a broader category of digital assets, potentially paving the way for a more diversified range of crypto products in the future.