SEC Approves First Dogecoin ETF, Signaling Dramatic Crypto Policy Shift

This week, U.S. regulators approved the first meme coin-based exchange-traded fund (ETF), with the Rex-Osprey Dogecoin ETF set to begin trading on Thursday. This marks a significant shift in the cryptocurrency regulatory policy of the U.S. Securities and Exchange Commission (SEC) under its new chairman, Paul Atkins, nominated by former President Trump.

Under the new regulatory environment, the SEC did not raise any objections to the fund, allowing it to officially list after the 75-day regulatory review period. This stands in stark contrast to the tenure of former chairman Gary Gensler, who took a hardline stance against cryptocurrencies and only approved the first batch of spot Bitcoin ETFs in January 2024 after losing a lawsuit.

In addition to the Dogecoin ETF, Rex Financial and Osprey Funds will simultaneously launch the first XRP ETF in the United States and have also applied to issue a $TRUMP ETF investing in Trump-themed meme coins. The Dogecoin ETF has a management fee rate of 1.5%, while the XRP fund charges a management fee rate of 0.75%. Both funds will be listed on the Cboe exchange. Currently, there are 90 to 100 cryptocurrency ETF applications awaiting approval, and analysts expect all these products to be approved.

In response, some analysts have warned that this move could confuse investors, leading them to mistakenly believe that digital assets like Dogecoin, which lack fundamental value and use cases, possess economic value. However, supporters point out that Dogecoin is currently the sixth-largest non-stablecoin cryptocurrency by market capitalization, indicating that market demand cannot be ignored.

Major Shift in SEC Policy Drives Cryptocurrency ETF Boom

Under the leadership of Paul Atkins, the SEC's attitude toward cryptocurrencies has undergone a fundamental change. On Wednesday, the SEC approved a new simplified listing standard for cryptocurrency ETFs, which is expected to unleash a wave of new products tracking digital currencies next month.

Bitcoin and Ethereum ETFs have already attracted over $175 billion in funds, with mainstream asset management companies like BlackRock and Fidelity dominating the space. Todd Rosenbluth, head of research at consulting firm TMX VettaFi, believes this is a watershed moment for the SEC's shift toward supporting cryptocurrencies.

Meanwhile, Bryan Armour, director of North American passive strategies research at Morningstar, warned, “I think it's dangerous. It normalises collectibles. [Dogecoin] seems to be a fad, like Beanie Babies or baseball cards.”

Unlike cryptocurrencies like Bitcoin and Ethereum, which have use cases in decentralized finance or as stores of value, meme coins lack such foundational support. They are often created as jokes and serve more as a form of online community engagement.

Greg King, CEO of Rex Financial, defended the move, stating, “The digital asset revolution is already underway. To be able to offer exposure to some of the most popular digital assets within the protections of the US [Investment Company Act of 1940] ETF regime is something Rex-Osprey is proud of and has worked diligently to achieve.”

Trump Family Pushes Cryptocurrency to 'Save the Dollar'

Eric Trump, the second son of former President Trump, stated that the growing demand for cryptocurrencies could "save the dollar" by attracting global investment inflows into the United States. He claimed that the digital asset boom would divert trillions of dollars from unstable currencies around the world to the U.S.

This year, the U.S. dollar has declined significantly, with Trump launching trade wars and repeatedly attacking the Federal Reserve, shaking investors' confidence in the dollar as the global reserve currency. At the same time, the dollar has been hit by concerns over the U.S. debt burden, which is expected to increase further due to the Trump tax bill.

Eric Trump made these remarks after ringing the Nasdaq opening bell for the market debut of cryptocurrency company American Bitcoin, in which he holds shares worth over $500 million.

It is worth noting that the Trump family's cryptocurrency investments include the Truth Social Bitcoin ETF, two meme coins, and a Bitcoin inventory business affiliated with Trump Media & Technology Group.

Eric Trump defended the MELANIA and TRUMP meme coins launched earlier this year, calling them merely "entertainment." He stated, “People want to bet on a coin, or they want to bet on a player…Or they just love somebody to death, and they want to buy…a kind of small piece of them, via digital currency.”