Published: February 5th, 2025
Asset management firm Grayscale gave TradFi investors risk-reduced exposure to crypto’s original meme coin last week when it launched its new Dogecoin Trust.
Best known in crypto circles for its spot Bitcoin and Ethereum exchange traded funds (ETFs), the firm said it believes the meme coin’s USD 49.7 billion market cap means its days as a joke coin are behind it.
Grayscale said in a press release that DOGE has transformed itself from a pop culture send-up to a ‘new instrument that can enhance financial inclusion, supporting grassroots political activism while also offering a viable new form of payment.’
On there same day, Grayscale also applied to the US Securities and Exchange Commission (SEC) to convert the Trust into a spot ETF. That mimics the process followed with its BTC and ETH ETFs, which both began life as private placements before being converted into ETFs.
As an apparently pro-crypto SEC leadership gets bedded in under the new Trump administration, a number of asset managers have filed applications for spot ETFs beyond the big two, including meme and altcoins like Dogecoin, XRP, and Litecoin.
‘Because it operates as a faster, more scalable, and lower-fee derivative of Bitcoin, Dogecoin offers people and organizations that have been underserved by traditional banking and finance a chance to fully take part in the financial system,' Grayscale said in a statement.
Twelve months ago, the idea that a spot ETF based on DOGE price movements could be seen as a viable financial product would have seemed far-fetched. Two days after Grayscale’s filing, asset manager Bitwise made its own application for a Dogecoin ETF.
Crypto investors scored a big win last year they won their longstanding battle with the SEC to launch a spot Bitcoin exchange-traded fund (ETF). Based on the success of the early entrants, ETF issuers are clearly ready to extend the experiment.
Several firms have recently proposed new spot ETFs that track the prices of altcoins and meme coins, including DOGE, SOL, XRP, and even newly minted TRUMP. Spot Solana ETFs are expected to launch on leading exchanges as early as this year.
New spot ETFs proposed so far include 21Shares Core Solana ETF, VanEck Solana Trust, Bitwise Solana ETF, and Canary Solana ETF. If approved they would track the price of SOL, currently the fourth-largest crypto by market cap.
Other issuers like Grayscale announced plans to offer spot Dogecoin ETFs after Donald Trump’s election win sent the Shiba Inu-inspired meme coin skyrocketing to a three-year-high of USD 0.478 in December 2024.
ETF specialist issuer Rex Shares made an application earlier this month to launch a product called Rex-Osprey DOGE ETF, the company’s SEC filing shows.
Funds based on the price of Ripple’s XRP alt coin are also in the works. Rex has made an application for its Rex-Osprey XRP ETF, as have both Canary and 21Shares. A list of new applications is now being considered by the SEC, with financial watchdogs expected to make a decision as early as March 2025.
Whether or not ETFs outside the realm of the big two will be approved or not remains to be seen. A raft of recent rule changes at the SEC, however, bode well for a green light from regulators.
Other possible ETFs could include an HBAR ETF, which Canary Capital applied for last November. HBAR is the native coin of the Hedera network.
Bloomberg analysts recency wrote that the odds are in favour of a spot HBAR ETF if it can launch ahead of higher-profile competitors like Solana and DOGE-based ETFs. How much pent-up investor demand there is, however, isn’t clear.
According to Bloomberg, a long list of Litecoin-based ETF applications have been made since pro-crypto President Trump's inauguration last week, as crypto’s restrictive US regulatory environment looks set to be loosened.
Surging digital asset inflows last November (Nov 2024) kicked off a new period of crypto mania.
A report from European asset manager CoinShares on Tuesday said that assets under management for crypto investment vehicles had hit a new all-time high of USD 138 billion. The high-water mark was reached last week when crypto traders and institutional investors poured USD 2.2 billion into crypto funds.
CoinShares maintains a global crypto fund tracker focused on instruments that give investors indirect exposure to digital coins and tokens like Bitcoin, Ethereum, and Solana, particularly spot exchange-traded funds (ETFs).
'The sudden surge in inflows looks to be sparked by a blend of loosening monetary policy and Donald Trump’s resounding victory in the recent US presidential election,’ CoinShares’ report said.
The firm's analysts wrote that most of the money found its way into US-listed spot ETFs, giving both sophisticated and retail investors exposure to cryptocurrency price movements.
America’s chief financial watchdog, the Securities and Exchange Commission (SEC), gave the green light to 11 new spot Bitcoin ETFs in January 2024. Managed by financial giants like BlackRock, Fidelity, and Grayscale, the funds give a broad range of investors the ability to invest in cryptocurrencies in a straightforward and regulated manner.
After Trump’s White House win and the Republican sweep of both houses of Congress on 5th November, earlier this month, the price of Bitcoin has skyrocketed to above USD 93,000, driven in part by enthusiasm for crypto ETFs.
It's not the first time this year investors have rapidly rushed into crypto ETFs. In August, Bitcoin exchange-traded funds (ETFs) saw inflows of USD 1.35 billion, chalking up the fifth-best week of the year for BTC-devoted funds.
Data from CoinShares showed that close to USD 1.44 billion in assets found their way into exchange traded crypto funds generally, bringing this year’s total to an all-time high of USD 17.8 billion, well in excess of 2021’s previous figure of USD 10.5 billion.
