Introduction
The asset manager 21Shares has submitted an application to the US Securities and Exchange Commission (SEC) for the approval of an Exchange-Traded Fund (ETF) for Dogecoin. This step could have significant effects on the crypto market and further increase interest in digital assets.
Details of the Application
- Objective of the ETF: The planned “21Shares Dogecoin ETF” aims to provide investors with the opportunity to invest indirectly in the memecoin without having to buy or hold Dogecoin themselves. The fund is passively structured and aims to track the performance of Dogecoin as closely as possible, measured against the CF DOGE-Dollar US Settlement Price Index.
- Custody and Management: The crypto assets are to be held in custody by Coinbase Custody. The acquisition and redemption of fund shares are conducted in so-called “Baskets” exclusively through authorized market participants.
- Support from House of Doge: House of Doge Inc., the corporate arm of the Dogecoin Foundation, will support the ETF with marketing, licensing, and strategic direction.
Market Reaction
- Price Increase: Following the announcement of the application, the price of Dogecoin rose by over 7% within 24 hours, surpassing the $0.16 mark.
- Long-term Effects: Although the price increase has not yet compensated for the losses of recent months, it could be a first impulse for a recovery rally.
Forecasts and Opportunities
- Approval Odds: Market forecasts see a high probability for the approval of the ETF by the SEC. The betting platform Polymarket estimates the chances at 64%, while Bloomberg analysts projected a probability of 75% in February.
- Institutional Interest: The application reflects the growing institutional interest in cryptocurrencies, which could further heat up the crypto market.
Impact on the Crypto Market
- Increased Interest: A Dogecoin ETF could boost interest in digital assets and potentially trigger a hype similar to that of Bitcoin ETFs.
- Debates on Necessity: Experts are debating whether the demand for spot ETFs for lesser-known cryptocurrencies like Dogecoin is large enough to justify these products.
Overall, the application for a Dogecoin ETF could further energize the crypto market and increase interest in digital assets, which could have positive long-term effects on the market.