Bitwise Eyes Dogecoin ETF – Is DOGE About to Dump?

Bitwise Asset Management has taken a significant step toward launching a Dogecoin-based exchange-traded fund (ETF) by officially filing an S-1 registration with the U.S. Securities and Exchange Commission (SEC).

This filing, submitted on January 28, 2025, marks a pivotal moment for the memecoin market, potentially opening the doors for institutional investors to gain regulated exposure to Dogecoin.

Bitwise’s Move Toward a Dogecoin ETF

This move follows Bitwise’s prior registration of a Dogecoin Trust in Delaware on January 22, signaling its broader ambitions in the crypto ETF space. According to Matt Hougan, Chief Investment Officer at Bitwise, the filing is a response to the growing demand for Dogecoin among investors.

Bitwise files for a spot Dogecoin ETF. Source: BSCGemsAlert via X

“The reality is that there are a lot of people that want to invest in Dogecoin. It’s the sixth-largest crypto asset in the world by market cap and it trades over $1 billion a day,” Hougan stated.

Growing Interest in Memecoin ETFs

Bitwise is not the only firm attempting to capitalize on Dogecoin’s popularity. Other asset managers, including Osprey Funds and Rex Shares, have also filed applications to introduce ETFs focused on Dogecoin and other high-profile memecoins such as Bonk and Trump-themed tokens.

Memecoins in ETFs: A risky gamble or a financial folly as firms bet on Dogecoin, Bonk, and more? Source: Blockman via X

The growing trend of memecoin ETFs aligns with broader market developments under the current U.S. presidential administration. The pro-crypto stance of President Donald Trump and his latest executive orders regarding digital asset regulation have enthused ETF issuers. Even the recent establishment of D.O.G.E. – short for Department of Government Efficiency – featuring the Dogecoin logo, has given way to further speculation that a Dogecoin ETF may see fewer obstacles toward regulatory approval.

Despite this enthusiasm, concerns about the speculative nature of meme coins still linger on. With their highly volatile nature, some analysts have likened investing in memecoin to gambling since they do not represent any fundamental financial logic. However, there are views that with the large market chunk and liquidity characterizing Dogecoin, it may actually fit the bill for an ETF.

Dogecoin’s Market Performance and Risks

Following the news of Bitwise’s ETF filing, Dogecoin saw a 4% decline in its price, reflecting mixed market reactions to the development. Technical analysis suggests that DOGE is currently trading within a descending triangle pattern, a formation that often signals potential downside risks.

Dogecoin (DOGE) price chart. Source:Brave New Coin

If Dogecoin breaches the lower boundary of this pattern, analysts predict a sharp decline of approximately 37%, bringing the price down to around $0.1905. However, if the price holds above its support levels, a recovery could be possible, especially if broader market sentiment shifts positively.

DOGE price is currently testing the key support at $0.32. Source: FinCaesar on TradingView

Indicators such as the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) currently show bearish momentum, while the Stochastic Oscillator suggests that Dogecoin may be oversold, potentially setting the stage for a short-term rebound.

Regulatory Outlook and Market Implications

The Commission’s decision on the Bitwise Dogecoin ETF will be watched closely, among other filings, for any indication of how it will approach the regulation of meme-coins. But with this administration, regulatory attitudes toward digital assets have signaled a friendlier role than hitherto, considering the elevation of crypto-friendly appointees such as Paul Atkins to important positions.

If approved, the proposed Bitwise Dogecoin ETF would create a regulated investment vehicle for retail and institutional investors alike who look to get exposure to the asset without holding it directly. This could attract more liquidity into the market and maybe dampen some of the price swings.

VanEck, 21Shares, Canary, and Bitwise meet SEC deadline for Solana ETF filings, kicking off the review process. Source: Chrome via X

However, challenges remain. The SEC has traditionally been very cautious about approving ETFs over highly volatile and speculative assets. While Bitcoin and Ethereum ETFs have been approved, meme coins like Dogecoin are often treated as a different class of assets altogether due to their origins as internet jokes and their susceptibility to social media hype cycles.

Bottom Line

Despite these concerns, the growing push for meme coin ETFs highlights the evolving nature of cryptocurrency investments.

Earlier today we learned that Grayscale Investments has filed formal paperwork with the New York Stock Exchange, aiming to upgrade its existing XRP Trust into a fully-fledged spot XRP ETF. If the regulators grant the green light, it would grant traders the ability to buy and sell shares tied directly to XRP’s real-time price movements, all managed under the protective umbrella of a regulated exchange. This could be a significant milestone for both Grayscale and XRP enthusiasts alike.

It shows the fast growing demand for spot crypto ETFs for serious assets such as Ripple’s XRP, and for meme coins like Dogecoin.

As the crypto market matures, the introduction of new financial products catering to a broader range of investors will likely continue. Whether Dogecoin can sustain its relevance in the ETF space remains to be seen, but for now, Bitwise’s filing marks another chapter in the growing institutionalization of the crypto market. Doge to a dollar, woof!