Dogecoin (DOGE) ETF: A Potential Tailwind for the King of Meme Coins

Dogecoin (DOGE -12.59%) just got exposure to what might become a strong new tailwind. While it will take at least a few months for it to develop, it could provide the king of the meme coins with some additional liquidity

Fresh regulatory filings from Osprey Funds and Bitwise Asset Management indicate their intention to establish exchange-traded funds (ETFs) for Dogecoin, opening up a potential avenue for investors to gain exposure to the meme coin's price action without the technical hurdles involved in directly purchasing Dogecoin.

This move could provide some support for Dogecoin's price, considering that most individuals have a larger portion of their funds in retirement and brokerage accounts compared to their cryptocurrency wallets. However, it's crucial to note that this doesn't alter Dogecoin's status as a speculative meme coin with inherently unpredictable price movements.

This investment should only be considered after attending to important financial goals, such as building an emergency fund and paying down high-interest debt. It's also not suitable for short-term holding due to its close resemblance to gambling.

If approved by regulators, these ETFs would align with the investment thesis for Dogecoin. While the asset lacks clear fundamentals to determine its fair market value, its survival for over a decade indicates that it's unlikely to vanish, despite the potential for an 80% decline in its value.

Moreover, increased capital flow from traditional financial accounts could help establish a floor for Dogecoin's price.

For now, the ETF should be viewed as a potential tailwind that could contribute to higher prices, rather than a solution to the volatility and high risks inherent in meme coin investments.

If you must have some exposure to meme coins, a very small allocation of your portfolio to Dogecoin is permissible, but only after covering the more critical financial goals mentioned above.

Finally, keep in mind that an ETF won't significantly aid your investment if you're not prepared to hold onto your Dogecoin for several years, although it may make tracking it easier.