Regulators Sidestep as Crypto ETFs Break Barriers

The U.S. has entered a new phase in digital asset investment with the debut of the first spot ETFs for Dogecoin (DOGE) and XRP, the third and fourth-largest cryptocurrencies by market capitalization. These ETFs, launched by Rex Financial and Osprey Funds, mark a significant regulatory and market shift in the U.S., following the long-awaited approval of spot Bitcoin and Ethereum ETFs earlier this year. The Dogecoin ETF, listed as DOJE on the Cboe BZX Exchange, and the XRP ETF, under the ticker XRPR, offer investors direct exposure to the current prices of these cryptocurrencies through traditional brokerage platforms.

This development comes after a prolonged legal and regulatory battle between crypto advocates and the Securities and Exchange Commission (SEC). The agency had historically been reluctant to approve spot crypto ETFs, citing concerns over market manipulation. However, a landmark rule change in July 2024, which allows exchanges to approve generic listing requirements for digital asset ETFs without SEC review, has accelerated the approval process. The new framework enables issuers to submit proposals directly to exchanges, significantly streamlining the process.

The DOJE and XRPR ETFs are structured to hold the respective cryptocurrencies directly, while also incorporating exposure from non-U.S. spot ETFs. This hybrid structure is a response to the regulatory constraints that have limited the development of pure spot ETFs in the U.S. The ETFs represent a broader trend of institutional-grade products entering the crypto market, with major financial firms like BlackRock and Fidelity already offering exposure to Bitcoin and Ethereum.

The launch of these funds reflects growing institutional interest in digital assets, particularly as traditional financial players expand their offerings to include crypto-related products. According to data from the crypto analytics firm SoSoValue, the U.S. spot Bitcoin ETFs have attracted over $57 billion in capital since their launch in January 2024. The success of those products has set a precedent for new entrants, with the DOJE and XRPR ETFs expected to follow a similar trajectory.

Despite the enthusiasm, some regulators have expressed concerns. Caroline Crenshaw, a commissioner at the SEC, criticized the rule change as a way to "pass the buck" on investor protection responsibilities. Her comments highlight the ongoing debate over how to balance innovation with risk management in the fast-evolving crypto market. Nevertheless, the growing availability of ETFs for alternative cryptocurrencies indicates a maturing market where investors are seeking a range of exposure options beyond the leading digital assets.

Looking ahead, the introduction of the DOGE and XRP ETFs is likely to pave the way for more diversified crypto investment products. With over 90 crypto ETF applications pending at the SEC as of August 2025, the market is expected to see continued expansion. The next major development may come in October, when the CME Group plans to introduce XRP and Solana (SOL) options. These derivatives are expected to provide institutional and retail investors with more sophisticated tools for managing risk and hedging positions.

In summary, the launch of the first U.S. spot ETFs for Dogecoin and XRP signals a pivotal moment in the integration of digital assets into traditional financial markets. As regulatory frameworks evolve and institutional participation increases, the crypto market is moving closer to mainstream acceptance. However, the long-term success of these products will depend on market demand, investor confidence, and the ability of regulators to maintain a balance between innovation and investor protection.