Regulators' Stalemate Prolongs Dogecoin ETF Fate in November Showdown

The U.S. Securities and Exchange Commission (SEC) has delayed its decision on Bitwise Asset Management’s application for a Dogecoin exchange-traded fund (ETF) until November 12, according to internal filings reviewed by Bloomberg. This marks the latest example of the SEC’s ongoing backlog of altcoin ETF proposals, as the agency continues to scrutinize applications from multiple providers seeking to bring exposure to non-Bitcoin cryptocurrencies to U.S. markets.

The Bitwise Dogecoin Trust ETF, which seeks to track the performance of the Dogecoin cryptocurrency through a representative futures contract, was initially submitted for regulatory approval in early 2024. However, the extended review period reflects the SEC’s heightened regulatory caution in the absence of a clear legal framework for digital assets. The commission has yet to provide a detailed explanation for the delay, but sources familiar with the matter suggest the review is being held up by internal disagreements over the treatment of altcoins under existing securities laws.

This delay places the Dogecoin ETF application among a growing queue of similar proposals from companies such as Grayscale, WisdomTree, and ARK, all of which are awaiting regulatory clarity. The SEC’s cautious stance has frustrated industry participants who argue that the U.S. is at risk of falling behind other jurisdictions, such as Canada and Singapore, which have already approved altcoin-focused ETFs. The prolonged review process has also raised concerns about regulatory arbitrage, as investors increasingly seek exposure to digital assets through offshore vehicles.

Data from the most recent filings show that the Dogecoin ETF would be structured as a trust, with the underlying exposure derived through a combination of futures and swaps, a common structure in the industry. The fund would be listed on the Cboe BZX Exchange and would be actively managed, with the provider responsible for rebalancing and managing the underlying crypto exposure. While the exact expense ratio has not been disclosed, previous Bitwise ETFs have typically carried fees between 0.25% and 0.50%.

Industry observers note that the SEC’s decision on the Dogecoin ETF could set a precedent for the treatment of altcoin funds and influence the regulatory trajectory for other proposals. If approved, the ETF could provide a much-needed boost to the Dogecoin market, currently valued at around $9 billion, by offering increased institutional and retail liquidity. Conversely, a rejection or further delay could signal continued resistance from the SEC to expanding the universe of approved digital asset products beyond Bitcoin.

As the November 12 deadline approaches, market participants will be closely monitoring the SEC’s internal discussions and any public statements from senior officials that could indicate the regulator’s evolving stance on altcoin products. In the absence of a clear timeline or decision-making framework, the regulatory uncertainty continues to pose a significant hurdle for innovation in the U.S. digital asset market.