Background and Core Mechanism of the Dogecoin ETF Application
On April 29, 2025, the Nasdaq Exchange officially submitted an application to the U.S. Securities and Exchange Commission (SEC) to list a spot Dogecoin (DOGE) ETF initiated by asset management firm 21Shares. If approved, the ETF will allow investors to indirectly hold DOGE through traditional brokerage accounts without managing private keys or crypto wallets, significantly lowering the participation threshold for institutions and individuals.
This ETF adopts a physically-backed model, with actual token assets custodied by Coinbase and tracking the CF Dogecoin-Dollar Settlement Price Index. Following Bitcoin and Ethereum ETFs, this marks the first attempt by mainstream financial institutions to incorporate a meme coin into a compliant financial product framework. The application reflects new opportunities in the crypto market under shifting Trump-era policies—In January 2025, the U.S. announced the inclusion of crypto assets in the “National Strategic Reserve” plan, encouraging the SEC to adopt a more open stance.
Regulatory Dynamics and Policy Impact
The SEC’s review of the Dogecoin ETF faces multiple challenges. On one hand, DOGE, as the eighth-largest cryptocurrency by market cap ($26 billion), has high volatility (over 400,000 transactions in 24 hours) and is heavily community-driven, raising concerns of market manipulation. On the other hand, Nasdaq emphasized in the filing that DOGE trading will be subject to the same surveillance standards as traditional securities via the Intermarket Surveillance Group (ISG), with enhanced disclosure requirements.
Currently, the SEC has initiated a 240-day public review period, requiring a final decision by the end of 2025. However, recent regulatory signals are mixed—on April 30, the SEC delayed rulings on DOGE and XRP ETF applications from Bitwise and Franklin Templeton, suggesting ongoing caution toward emerging crypto assets. Nonetheless, the Trump administration’s support for “self-custody rights” and the new SEC Chair’s flexible stance on asset classification offer a potential approval window for the DOGE ETF.
Potential Market Impact and Risks
If approved, the Dogecoin ETF could trigger a range of ripple effects.
- In the short term, DOGE prices showed little reaction to the announcement, but a delay or rejection by the SEC could spark a sell-off similar to the $438 million net outflow seen after the Bitcoin ETF setback in November 2024.
- In the long term, the ETF could draw in institutional capital—pension funds, hedge funds, and others—accelerating DOGE’s transition from a meme coin to a foundational layer for payments and DeFi.
However, risks remain. DOGE’s 5% annual inflation model (5 billion new tokens minted yearly) contrasts with Bitcoin’s scarcity narrative, potentially weakening its appeal as a store of value. In addition, the QED Protocol plans to launch a DOGE Layer2 network in September 2024 to support smart contracts, but the effectiveness of this upgrade remains unproven.
To explore more DeFi and Layer2 developments, refer to JuCoin’s DeFi & Layer2 section.
Outlook on Meme Coin Regulation
The 21Shares application marks a pivotal shift from “fringe innovation” to “mainstream financial tool” in crypto markets. If the DOGE ETF is successfully approved, it could pave the way for regulatory inclusion of altcoins like Solana (SOL) and XRP, accelerating the formation of diversified crypto investment portfolios. At the same time, the U.S. may further solidify its dominance in the global crypto ETF market, prompting jurisdictions like Hong Kong and Singapore to revise policies to remain competitive.
For investors, the potential approval of the DOGE ETF is both an opportunity and a challenge. While institutional inflows could boost market liquidity, one must be cautious of the complex balance between regulatory uncertainty, technical risk, and price volatility. As the crypto market evolves from grassroots communities to Wall Street, Dogecoin may become a key litmus test in this transformation.
Neason Oliver
