It is only a matter of days before the biggest meme coin, Dogecoin, gets its spot exchange-traded fund (ETF). Growing indications are pointing to the possibility of seeing a spot DOGE ETF before the end of the year.
The approval of Dogecoin exchange-traded funds is considered by many commentators and community members alike as a crucial moment for the meme coin king. For years Dogecoin lived on the fringes and widely regarded as a joke-turned-community-phenomenon driven by memes, celebrity endorsements, and retail FOMO.
However, an ETF will help change the narrative and enhance how institutional investors access DOGE. Instead of a compulsory exposure to the crypto market by buying the meme coin on an exchange and storing it themselves, investors can hold the token in a regulated environment.
Simply, it provides security infrastructure and market protection that stocks and bonds enjoy. This article aims to dissect what the approval of a spot DOGE ETF means for the entire meme coin sector.
Why is an ETF approval crucial for Dogecoin to hit mainstream
ETFs lower the practical and regulatory friction for investors. Custody, secure wallets, exchange onboarding, and tax reporting are bottlenecks for traditional investors. However, a DOGE ETF will reduce the stress and responsibilities that come with holding crypto directly as fund sponsor and custodians help manage the assets.
This option is quite attractive to pension funds, family offices, and retail investors who won’t touch self-custody but will buy a ticker through their brokerage app. However, this new hope for Dogecoin wouldn’t have been possible without the change of approach by the United States Securities and Exchange Commission (SEC).
To an extent, the SEC’s broader rule changes this year made it easier to list spot crypto ETFs, allowing digital tokens like Bitcoin and Ether to gain attention from institutional investors. Thanks to this development, the structural barrier that long kept meme coins on the sidelines is no more.
Aside from opening up more investment opportunities, the Dogecoin ETF also signals the embracement of the meme coin by regulators as a legitimate project. An ETF confers a veneer of institutional legitimacy as exchanges must list the product, while custodians must meet regulatory standards, and portfolio managers face disclosure and compliance obligations.
Hence, when a Dogecoin ETF goes live, it signals that a regulated financial ecosystem has judged the market infrastructure sufficient for a listed product. Likewise, it also indicates that regulators are willing to let exchanges apply standardized listing rules. By that, DOGE is on the brink of moving away from a mere internet novelty toward financial products.
How will it benefit other meme coins
The potential approval is also good news for the meme coin market. With Dogecoin leading the charge, other tokens in the meme coin sector are likely to get similar attention.
More so, the approval of the spot BTC ETF has been followed by Ether and XRP with SOL also fast approaching. Therefore, some crypto commentators argued that the meme coin space could follow a similar trend.
One key benefit of the approval for meme coins is more liquidity. According to Coinmarketcap, the value of the meme coin market is $56 billion despite soaring to around $76 billion in July.
With ETFs, more investors will gain the confidence to invest in meme coins trusting their accreditation by regulators. By that, the market capitalization of the meme coin market will skyrocket, pushing it to new heights.
Parting words
Despite nearing more institutional adoption, the characteristics of DOGE and other meme coins remain the same. Dogecoin, for instance, retains its inflationary supply schedule, market hype, celebrity endorsement, and sudden price change.
That said, Dogecoin ETFs could inherit the volatile posture of the meme coin which may not suit allocations for risk-averse investors. To an extent, the approval indicates Dogecoin is getting mainstream attention as it places the token alongside other tradable assets in investors’ portfolios.
Yet, it is not an outright validation of some of Dogecoin’s questionable models. At the moment, there are high hopes that the approval of the new investment will turn institutional attention to the broader meme coin community.
Top meme coins like Shiba Inu, Pepe, Bonk, and Pudgy Penguins are on course to follow the footsteps of Dogecoin. Nevertheless, it is important to always remember that an ETF wrapper does not change the underlying tokenomics or cultural roots that still make meme coins high-risk, speculative investments.
Read More :