NYSE Arca Proposes Rule Change to List Bitwise Dogecoin ETf

On March 3, NYSE Arca, a subsidiary of the New York Stock Exchange, filed a proposed rule change with the U.S. Securities and Exchange Commission (SEC) to list and trade shares of the Bitwise Dogecoin ETF. This move, if approved, could bring a significant development to the world of cryptocurrencies, as it would offer regulated exposure to Dogecoin (DOGE), one of the most well-known memecoins, for both institutional and retail investors.

A Step Toward Regulated Exposure

The Bitwise Dogecoin ETF aims to provide investors with a straightforward way to gain exposure to Dogecoin without directly purchasing and storing the cryptocurrency. Coinbase will serve as the custodian for Dogecoin, while Bank of New York Mellon will handle cash custody, administration, and transfer agency functions. Notably, the ETF uses a cash creation and redemption process, meaning investors cannot directly deposit or withdraw Dogecoin from the fund. Instead, they will participate in cash-based transactions, which is typical for ETFs that deal with digital assets.

SEC Filing and Regulatory Process

The Bitwise Asset Management submitted the initial S-1 registration form for the Dogecoin ETF with the SEC in late January. Should the SEC approve the proposal, this fund would represent one of the first U.S.-listed ETFs focused on a memecoin, paving the way for further institutionalization of digital assets. However, the filing has yet to undergo the SEC’s rigorous review process, and approval is not guaranteed.

The potential approval of this Dogecoin ETF follows similar applications from other crypto issuers. In February, the SEC acknowledged Grayscale’s filing for the Grayscale Dogecoin Trust, beginning the review process, which is expected to conclude around mid-October.

Market Reaction and Broader Crypto Trends

Despite the buzz around the potential approval of the Dogecoin ETF, Dogecoin's price did not react positively to the filing. On the day of the filing, the cryptocurrency saw a decline of more than 15%, falling to around $0.19. This drop is part of a broader downturn in the crypto market, which has erased most of the gains from former President Donald Trump’s announcement on March 2 regarding a U.S. Crypto Reserve.

While the Dogecoin ETF proposal has not moved the needle for the price of DOGE in the short term, it is a significant step in the growing trend of altcoin ETF applications. In recent months, there has been a surge in filings for funds that track the prices of various altcoins, such as Cardano (ADA), Solana (SOL), Polkadot (DOT), Litecoin (LTC), and XRP. This is largely due to the SEC’s crypto-friendly stance under the current administration, signaling a shift in regulatory attitudes toward cryptocurrencies.

Similar Proposals from Other Exchanges

The Bitwise Dogecoin ETF proposal is not the only ETF application currently under review. On March 3, Nasdaq also filed a proposed rule change with the SEC to list the Grayscale Hedera Trust, a fund tracking the price of HBAR, the native token of the Hedera Network. This filing follows a similar submission by Canary Capital in late February, which aims to launch a Hedera-based product.

These filings are part of a broader trend where exchanges and issuers are seeking to offer regulated products based on the performance of cryptocurrencies and digital assets. As the SEC’s approach to cryptocurrency regulation continues to evolve, it remains to be seen how these applications will be treated in the long term.

Conclusion

The proposed Bitwise Dogecoin ETF marks an important moment in the ongoing integration of cryptocurrencies into traditional financial markets. If approved, it could provide a regulated pathway for a wider range of investors to gain exposure to Dogecoin, one of the most popular and volatile cryptocurrencies.

With several similar ETF applications on the table, including funds based on other altcoins like Hedera and Grayscale’s Dogecoin Trust, the future of cryptocurrency ETFs looks increasingly promising as the SEC continues to navigate the regulatory landscape. However, with the market still in flux, the ultimate fate of these products will depend on how the SEC moves forward with its evaluations and approvals.