Canary Capital Files for First US NFT ETF, Sparking 20% PENGU Token Rally

Canary Capital, a prominent asset management firm, has submitted an application to the U.S. Securities and Exchange Commission (SEC) for an exchange-traded fund (ETF) that will hold PENGU, the governance token of the Pudgy Penguins NFT collection. The proposed ETF, if approved, would be the first of its kind in the United States to hold non-fungible tokens (NFTs). According to the filing, the ETF is designed to hold spot PENGU as well as various Pudgy Penguins NFTs, marking a significant development in the integration of digital assets into traditional financial products.

The announcement of Canary Capital's ETF application has sparked a notable rally in the price of the PENGU token and Pudgy Penguins NFTs. This surge in value reflects the growing interest and optimism within the crypto community regarding the potential approval and launch of the ETF. The inclusion of NFTs in an ETF structure represents a novel approach to investing in digital assets, providing investors with a more accessible and regulated means of participating in the NFT market.

The submission of the Form S-1 by Canary Capital to the SEC is a crucial step in the regulatory process for the ETF. This form provides detailed information about the fund's structure, investment strategy, and risk factors, allowing the SEC to evaluate the proposal thoroughly. The approval of such an ETF would not only validate the growing acceptance of digital assets but also pave the way for similar products in the future.

The move by Canary Capital to file for a PENGU ETF comes amid an expanding landscape of crypto offerings. The firm's decision to focus on PENGU and Pudgy Penguins NFTs underscores the increasing demand for diversified investment opportunities within the digital asset space. As the crypto market continues to evolve, the integration of NFTs into traditional financial instruments like ETFs could attract a broader range of investors, further driving the adoption and growth of digital assets.

Canary Capital aims to offer investors access to the portfolio’s digital assets through a traditional brokerage account, eliminating the barriers and risks associated with directly acquiring and holding these assets. The trust also proposes to hold other digital assets, such as ETH and SOL that are directly or indirectly related to either the PENGU token or the Pudgy Penguins NFTs. This approach could make it easier for institutional investors to gain exposure to the NFT market without the complexities of direct ownership.

The PENGU token launched on Solana in December 2025 and was primarily airdropped to Pudgy Penguins NFT holders, as well as members of the Ethereum and Solana communities, along with other select groups. The token's distribution strategy highlights the community-driven nature of the Pudgy Penguins project, which has garnered significant attention and support within the crypto community.

If approved, the PENGU ETF would mark a major turning point for NFTs and digital collectibles, many of which have struggled to gain institutional recognition as an asset class. The approval of such an ETF could set a precedent for other digital assets, potentially leading to a broader acceptance and integration of NFTs into traditional financial markets. This development could also encourage more asset management firms to explore similar ETF offerings, further expanding the range of investment opportunities available to investors.