Trading volume for Grayscale’s recently launched Dogecoin exchange-traded fund (ETF) has been disappointing, falling considerably short of initial forecasts despite being a historical first in the U.S. The anticipated performance was evaluated by Bloomberg ETF analyst Eric Balchunas, who noted that the ETF earned just $1.4 million during its debut trading session on Monday, whereas expectations were around $12 million. Although Balchunas described this volume as respectable for a typical launch, it remains lackluster for a product that is a first of its kind.
A competing Dogecoin ETF from Bitwise is set to debut shortly, having officially submitted its request for approval and listing to the Exchange on Tuesday. According to Bitwise’s announcement, their ETF should commence trading on Wednesday.
This new surge of Dogecoin-based funds comes on the heels of a significant uptick in cryptocurrency ETFs, following the SEC’s recent adjustments to listing regulations in September, allowing asset managers to tap into the growing demand for investments tied to high-risk crypto tokens.
Source
Source: Eric Balchunas
Understanding the ETF Structures
The REX Osprey Dogecoin ETF (DOJE), which was introduced last month, is also noteworthy as it was the first to provide investors with Dogecoin exposure in the U.S. However, to expedite its entry into the market, it chose a model that doesn’t directly hold cryptocurrency assets.
DOJE, registered under the Investment Company Act of 1940, operated within a 75-day approval period and restricted its investments to offshore subsidiaries holding Dogecoin, along with shares in Dogecoin ETFs from Europe and Canada.
In contrast, Grayscale’s Dogecoin ETF and Bitwise’s upcoming fund were submitted under the Securities Act of 1933, which allows them to maintain direct holdings of Dogecoin but requires a longer total approval timeline of 240 days.
The new entries into the Dogecoin ETF space have gained popularity amid the launch of various XRP ETFs, which have collectively attracted nearly $130 million in capital during their debuts. Balchunas estimates that there might be over 100 ETFs hitting the market in the upcoming months, indicating a robust enthusiasm from investors and fund managers alike.
