Dogecoin ETF Landscape Shifts: SEC Delays Bitwise, '40 Act Fund DOJE Set to Launch
📌 SEC Extends Review Period for Bitwise Dogecoin ETF
⚖️ The U.S. Securities and Exchange Commission (SEC) has announced a delay in its decision regarding the Bitwise Dogecoin ETF proposal submitted by NYSE Arca. In a notice dated September 9, the SEC stated that it requires a “longer period” to fully assess the proposed rule change under Rule 19b-4, extending the deadline to November 12, 2025. This extension pushes back the potential listing of Bitwise’s DOGE trust as Commodity-Based Trust Shares under NYSE Arca Rule 8.201-E.
⚖️ This delay follows the SEC's established pattern of extending review periods for novel crypto investment products, reflecting the agency's cautious approach to digital asset regulation. The initial anticipation surrounding the Bitwise application highlights the growing demand for regulated and accessible Dogecoin investment vehicles, especially after the successful launch of spot Bitcoin ETFs earlier in the year.
📌 The '40 Act Alternative: REX Shares and Osprey Funds to Launch DOJE
🚀 While Bitwise faces further regulatory hurdles, REX Shares and Osprey Funds are poised to launch their Dogecoin ETF, trading under the ticker DOJE, as early as this Thursday. What's significant is that DOJE is structured under the Investment Company Act of 1940, providing an alternative regulatory pathway to offer DOGE exposure without relying on the traditional '33/'34 Act spot-commodity-trust framework. Foreside Fund Services will distribute this fund.
This move mirrors their previous strategy with the Solana product SSK, which gained exposure to SOL and staking rewards by leveraging the '40 Act. This marks a pivotal moment as it introduces a potentially faster route for crypto ETFs to market, bypassing the often lengthy and uncertain exchange rule-change approval process.
📌 Historical Context and Regulatory Landscape
⚖️ The race to launch a Dogecoin ETF highlights the evolution of crypto investment products and the ongoing tug-of-war between innovation and regulation. The initial wave of spot Bitcoin ETFs, approved via the traditional Securities Exchange Act of 1934 route, set a precedent but also revealed the SEC's meticulous and often protracted review process. The emergence of '40 Act funds like DOJE signals a strategic shift in how issuers are approaching the market, seeking alternative structures to meet investor demand while navigating regulatory constraints.
⚖️ The SEC's historical concerns around crypto assets have centered on investor protection, market manipulation, and the potential for fraud. These concerns have shaped the agency's approach to approving crypto-related investment products, often resulting in delays and stringent requirements. The approval of Bitcoin ETFs earlier this year was a significant milestone, but the SEC continues to scrutinize altcoin-based products closely.
⚖️ The historical reluctance of the SEC to embrace crypto assets stems from regulatory failures to preempt risks in the market, such as the collapse of several large crypto exchanges, which heightened regulatory scrutiny and increased demands for greater investor protection. The emergence of the '40 Act route may signify a shift toward regulated entities offering innovative crypto investment products under existing regulatory frameworks.
📊 Market Impact Analysis
⚖️ The dual-track approach to Dogecoin ETFs could have significant implications for the crypto market. The delay of the Bitwise application may temporarily dampen enthusiasm for spot DOGE ETFs, but the launch of DOJE could inject fresh capital and investor interest into Dogecoin and the broader meme coin sector.
🚀 Short-Term Effects: Expect potential price volatility in DOGE as the market reacts to the launch of DOJE and the delayed decision on Bitwise. Investor sentiment could shift towards '40 Act funds, viewing them as a more viable avenue for crypto exposure. The price of Dogecoin could see a bump as DOJE launches, followed by a period of price discovery.
⚖️ Long-Term Effects: The success of DOJE could pave the way for more '40 Act crypto ETFs, potentially transforming the ETF landscape. This could lead to increased competition among issuers and greater diversification of crypto investment products available to investors. If DOJE demonstrates significant adoption, it could pressure the SEC to expedite the approval process for other spot altcoin ETFs, including the Bitwise Dogecoin ETF.
⚖️ Sector Transformations: The entrance of the '40 Act ETF structure could extend beyond meme coins to other areas of the crypto market. For example, DeFi projects could utilize this structure to provide exposure to yield-generating assets. Likewise, NFTs could leverage '40 Act funds to provide exposure to curated collections.
📊 Currently, DOGE is trading at $0.24. The market should pay close attention to trading volumes and price action of both DOGE and DOJE as these events unfold.
📌 Key Stakeholders' Positions
| Stakeholder |
Position |
Impact on Investors |
| ⚖️ SEC |
👥 Cautious, prioritizing investor protection; extending review for spot DOGE ETFs. |
⚖️ Delays create uncertainty, but could lead to more robust regulation. |
| Bitwise |
✅ Seeking approval for spot DOGE ETF via traditional '33/'34 Act route. |
Represents commitment to established regulatory pathways. |
| REX/Osprey |
Launching DOJE via '40 Act, bypassing traditional hurdles. |
Offers potentially faster route to DOGE exposure. |
🔮 Future Outlook
⚖️ The future of Dogecoin ETFs and crypto investment products hinges on the SEC's evolving stance and the performance of innovative products like DOJE. Expect continued debate around the appropriate regulatory framework for digital assets, with pressure from industry participants for greater clarity and efficiency.
🤝 Potential Opportunities: Investors may find new opportunities in '40 Act crypto ETFs, particularly those offering exposure to unique assets or strategies. Issuers could explore novel structures and partnerships to bring innovative crypto investment products to market.
⚖️ Potential Risks: Regulatory uncertainty remains a key risk, with the possibility of SEC intervention or changes to the rules governing '40 Act funds. Market volatility and the inherent risks associated with Dogecoin and other meme coins should be carefully considered.
📌 🔑 Key Takeaways
- The SEC has delayed its decision on the Bitwise Dogecoin ETF, extending the review period to November 12, 2025, indicating a cautious approach to spot altcoin ETFs.
- REX Shares and Osprey Funds are launching DOJE, a Dogecoin ETF structured under the Investment Company Act of 1940, potentially offering a faster route to market. This mirrors their previous success with the SSK Solana ETF.
- The existence of two parallel tracks for Dogecoin exposure – the traditional '33/'34 Act route and the '40 Act alternative – highlights the evolving landscape of crypto ETFs.
- The success of DOJE could pave the way for more '40 Act crypto ETFs, potentially transforming the ETF landscape and increasing competition among issuers.
- Investors should carefully monitor the performance of DOJE and regulatory developments related to crypto ETFs, as these events could significantly impact market sentiment and investment strategies.
🔮 Thoughts & Predictions
The diverging paths of Dogecoin ETFs underscore a crucial shift: regulatory arbitrage is becoming a key factor in crypto ETF innovation, potentially allowing issuers to bypass bottlenecks by leveraging existing legal structures. The success of DOJE will be a critical test case, determining whether the '40 Act can serve as a viable and scalable alternative to the protracted '33/'34 Act approval process. We may see a surge of '40 Act filings for other altcoins if DOJE gains traction, potentially shifting market dynamics away from reliance solely on SEC approvals for spot commodity trusts. Investors should carefully consider the risk profile of meme coins, including Dogecoin, before investing in these ETFs.
🎯 Investor Action Tips
- Monitor the trading volume and price action of DOJE closely after its launch to gauge market acceptance and potential liquidity.
- Evaluate the regulatory risks and opportunities associated with both '33/'34 Act and '40 Act crypto ETFs before making investment decisions.
- Assess your risk tolerance for meme coin investments, considering the inherent volatility and speculative nature of Dogecoin.
- Consider diversifying your crypto ETF portfolio across different asset classes and regulatory structures to mitigate risk.
📘 Glossary for Investors
⚖️ '33 Act (Securities Act of 1933): This Act requires that investors receive financial and other significant information concerning securities being offered for public sale. It aims to prevent misrepresentation, deceit, and fraud in the sale of securities.
⚖️ '40 Act (Investment Company Act of 1940): This Act regulates the organization of companies, including mutual funds, that engage primarily in investing, reinvesting, and trading in securities. It's designed to protect investors by requiring these companies to disclose their financial condition and investment policies.
🧭 Context of the Day
The emergence of '40 Act ETFs like DOJE suggests a potential workaround to the SEC's cautious approach, offering investors a faster route to crypto exposure.
