Key Insights:
- A top analyst says Dogecoin ETF approval could happen this week under the 40 Act shortcut.
- Whales now hold 10.91 billion DOGE, near four-year highs, showing strong pre-ETF accumulation.
- Nearly $500 million in trader funds face risk if a DOGE price rally on ETF approval hype triggers forced short liquidations.
Dogecoin ETF approval could be confirmed this week. A top market analyst says the product, called the Rex-Osprey DOGE ETF, is already lined up for a Thursday launch under the ticker $DOJE. It would give U.S. investors a way to gain exposure to Dogecoin through stock markets without holding the coin itself.
But there is a catch. The approval is coming through the “40 Act,” a law created in 1940 that regulators sometimes use to speed up approvals for certain investment funds. While this shortcut has worked for other crypto ETFs, applying it to Dogecoin, a meme coin with no real utility, makes the launch both unusual and risky.
Whales Position Ahead of Dogecoin ETF Approval
Whales are already preparing for a likely Dogecoin ETF approval this week. Wallets holding between 1 million and 10 million DOGE now control 10.91 billion tokens, about 7.23% of the supply.
This is the highest level in almost four years.
Their behavior has shifted. In mid-August, whales sold into the first wave of ETF rumors, cashing in on hype. But since late August, as the odds of approval climbed to around 93%, whales have switched to accumulation. That shows they are preparing for higher demand if the ETF launches.
The Rex-Osprey Dogecoin ETF is backed by REX Shares and Osprey Funds. Both firms have used the 40 Act path before, including for their Solana ETF.
This adds weight to the belief that approval is not just a rumor, but a likely event.
$500M in Trader Funds Face Risk Despite Dogecoin ETF Optimism
Not everyone will benefit if the Dogecoin ETF goes live. Traders betting against DOGE could lose the most.
Shorting means borrowing DOGE to sell at today’s price, hoping to buy back cheaper later. If the price rises instead, they must cover at a loss.
Data shows $185 million worth of shorts on Bitget, a large crypto exchange, are exposed over the next 30 days. Across all exchanges, the figure is close to $500 million.
If the Dogecoin ETF approval sparks a rally, these traders could be forced to buy back their positions, creating a liquidation chain that drives DOGE even higher.
On-chain analysts warn that shorts may not survive a rally. Data shows $185 million in short positions on Bitget, a major crypto exchange, are vulnerable over the next 30 days. Across all exchanges combined, the exposure is closer to $500 million.
Liquidations often create a chain reaction. If the price rises and shorts close in loss, that forced buying pushes the price even higher. This triggers more liquidations, repeating the cycle. For Dogecoin, a confirmed ETF approval could be the spark that sets off this loop.
The Catch: First Meme Coin ETF With No Utility
The catch is about what this Dogecoin ETF really represents. If approved, it would be the first U.S. ETF tied to a meme coin, an asset that openly has no real use case.
Unlike Bitcoin, which is seen as digital gold, or Ethereum, which powers smart contracts, Dogecoin remains a coin defined by hype and community.
Balchunas also pointed out the same: “no utility on purpose.” That line highlights Dogecoin’s unusual status: a coin born as a joke, but now being treated like a serious investment vehicle.
For some, this makes the approval historic, as it brings meme coins into mainstream finance. For others, it raises concerns about regulators approving funds linked to assets without clear value.
Charts show this mix of factors in play. Whale accumulation picked up after late August, retail traders are returning, and shorts are heavily exposed.
Once the approval comes, DOGE could see sharp rallies. However, if it is delayed or denied, prices may drop quickly, as much of today’s buying is based on anticipation.
In other words, if the Dogecoin ETF is approved, the cryptocurrency may rally quickly as both retail and institutions gain easier access. For traditional investors, $DOJE offers a way to buy DOGE exposure through regular stock accounts.
For crypto traders, the news could unleash another round of speculative buying.