Investors can now speculate on a dog-themed memecoin straight from their brokerage accounts. On Thursday morning, the U.S.’s first spot Dogecoin ETF went live on Cboe BZX, an exchange headquartered in Chicago. Spot funds give traders exposure to current asset prices—as opposed to futures or other derivatives.
Dogecoin is widely considered to be the first memecoin, or a cryptocurrency that references an online joke and doesn’t have underlying utility. Dogecoin derives its name from a popular meme that features a Shiba Inu dog and absurdist text, like “so amaze.”
The launch of a memecoin ETF illustrates the shift in the regulatory landscape over the past year in favor of the crypto industry—especially since blockchain advocates battled with the Securities and Exchange Commission for years to launch a spot ETF for Bitcoin, the largest cryptocurrency by market capitalization. Now, especially with new rule changes voted in Wednesday by the SEC, the floodgates for funds tied to digital assets appear to be wide open.
The ETF issuer Rex Financial and its sister firm Osprey Funds, which specializes in crypto investments, jointly manage the Dogecoin ETF. The fund is listed with the ticker DOJE. The price of the memecoin is up 7% over the past 24 hours to almost 29 cents, according to data from Binance.
“We’re doing something nobody’s ever done, and it’s catching a lot of people by surprise,” Greg King, CEO of REX Financial, told Fortune.
The rise of crypto ETFs
The Dogecoin ETF, like other crypto funds, lets traditional investors and institutions, who usually don’t have access to crypto exchanges like Coinbase, speculate on cryptocurrencies from within traditional brokerage platforms such as Fidelity.
Proponents have long said crypto ETFs can attract new investors to allocate portions of their portfolio into digital assets, but for years, the SEC blocked spot crypto ETFs from going live. The agency cited fears of market manipulation for its hesitancy.
In January 2024, after a prolonged legal battle with the crypto financial firm Grayscale, the agency relented, and the U.S.’s first spot Bitcoin ETFs came to market, including an entry from the asset management titan BlackRock. Since their launch, over $57 billion in capital has flowed into spot Bitcoin ETFs in the U.S., according to data from the crypto analytics site SoSoValue.
The success of the Bitcoin funds opened the floodgates for new crypto ETFs to hit the market. Soon, in July 2024, BlackRock and other competitors launched ETFs for Ethereum, the world’s second-largest cryptocurrency. And, one year later, Rex Financial and Osprey Funds launched the first ETF for Solana, another digital asset.
On Wednesday, the SEC approved rule changes to allow exchanges to adopt generic listing requirements for digital asset ETFs. Rather than needing to pass through customized, manual review from the SEC, ETF issuers will send their proposals directly to the exchanges.
That fast-tracking has at least one regulator worried.
“The Commission is passing the buck on reviewing these proposals and making the required investor protection findings, in favor of fast tracking these new and arguably unproven products to market,” wrote Caroline Crenshaw, a commissioner at the SEC, in a statement alongside the agency’s decision.
On Thursday, Rex Financial and Osprey Funds also launched the first spot ETF for XRP, another cryptocurrency.