The potential approval of the Dogecoin ETF raises interest and discussions about market risks and impacts.
Preparation for Dogecoin ETF Approval
Analysts suggest that the Dogecoin ETF approval could occur this week. The product, named Rex-Osprey DOGE ETF, is poised for launch under the ticker $DOJE. This ETF will provide U.S. investors access to Dogecoin via stock markets without directly holding the coin. However, the approval is set to come through the 40 Act, raising questions about the applicability of this process to a meme coin devoid of real utility.
Risks for Traders with ETF Approval
Not all market participants will benefit from the launch of the Dogecoin ETF. Traders betting against DOGE risk facing significant losses should prices rise. Data indicates that $185 million worth of short positions on Bitget are exposed over the next 30 days, with the total across all exchanges near $500 million. A price surge upon ETF approval could trigger a chain reaction of short liquidations.
Caveats of the First Meme Coin ETF
Should the Dogecoin ETF receive approval, it will be the first of its kind tied to a meme coin, an asset without real-world applications. Experts like Eric Balchunas have pointed out the inherent risks associated with Dogecoin lacking utility. If approved, it marks a significant event for the cryptocurrency market, but a delay or denial could lead to rapid price declines.
The expected approval of the Dogecoin ETF opens new investment avenues but also involves considerable risks that need to be taken into account.
