Memecoin ETF Filings Multiply as Bitwise Registers Dogecoin S-1

Filings for crypto exchange-traded funds (ETFs) are coming in on an almost daily basis. Earlier this week, Tuttle Capital Management announced their filing of 10 leveraged crypto ETFs, featuring some well-known coins such as Solana (SOL), XRP and Chainlink (LINK), as well as Trump's memecoin TRUMP and the First Lady's MELANIA.

Crypto exchange-traded fund (ETF) filings are being submitted almost daily. Earlier in the week, Tuttle Capital Management announced the filing of 10 leveraged crypto ETFs, which notably feature some well-known coins such as Solana (SOL), XRP and Chainlink (LINK), as well as Trump’s memecoin TRUMP and the First Lady’s MELANIA.

However, Tuttle has since issued a statement revealing that it has withdrawn these filings. Bloomberg Senior ETF Analysts Eric Balchunas suggested in a post on Twitter that this may be where the US Securities and Exchange Commission (SEC) “draws the line” when it comes to what’s acceptable and what not.

“Tuttle withdrew the filing for the 2x Melania, Trump etc ETFs. Typically this happens when the regulators call the issuer and are like, 'c'mon'.” Balchunas wrote, adding that this is why it’s notable the Trump, Doge filing from Rex *hasn't* been withdrawn. Some early signs of where line may be for SEC.”

The latest filing for a Dogecoin (DOGE) ETF is also particularly interesting. Bitwise has filed an S-1 for their Bitwise Dogecoin ETF, officially following the trust registration last week.

“NEW: @BitwiseInvest officially files an S-1 for the Bitwise Dogecoin ETF,” Balchunas said, adding that this is “the first ‘33 Act (a la $IBIT) doge filing.”

An ETF filing under the Securities Act of 1933 suggests that the fund is structured as a traditional securities offering, which means that it aims to hold “physical” Dogecoin directly.

In comparison, an ETF filing under the Investment Company Act of 1940 doesn’t have the same physically backed structure, which implies it may not directly hold Dogecoin. Instead, it might invest in derivatives or other securities linked to the performance of Dogecoin.

Morningstar executive Bryan Armour told the Financial Times that he doesn’t “understand the use case or the purpose of these ETFs, other than to gamble on whether the price is going up or down”.

The director of passive strategies research for North America said these funds are “moving away from the purpose of capital markets.”

Meanwhile, the “proper” ETFs — the Bitcoin and Ethereum funds — have seen a combined US$600 million (AU$963.3 million) in net outflows over the past two days.

Data from Farside Investors for Tuesday isn’t fully available for all ETFs, but data for Monday shows that despite IBIT’s US$63.9 million (AU$102.5 million) net inflows, several funds experienced net outflows, bringing the total flows into negative territory.

Fidelity’s FBTC and Grayscale’s GTBC suffered the most, with net outflows of US$268.6 million (AU$431.3 million) and US$108.5 million (AU$174.1 million) respectively.

Ethereum ETFs fared slightly better with only US$136.2 million (AU$218.4 million) in net outflows, with Grayscale’s ETHE seeing the largest single-day net outflows at US$84.2 million (AU$135.1 million).

All the US Spot Bitcoin ETFs combined now hold 5.55% of all BTC with 1.165 million of the coin.