It took institutions over a decade to take bitcoin (BTC) seriously as an investment vehicle, even though well-known financial pioneers had embraced the largest cryptocurrency on the market years earlier.
However, not even one year after the launch of the spot bitcoin exchange-traded funds (ETFs), which saw substantial adoption from pension funds, hedge funds, and even universities, one issuer is taking it a step further.
The latest filings with the Securities and Exchange Commission (SEC) are aimed at introducing meme coin ETFs—such as those tracking dogecoin (DOGE) or U.S. President Donald Trump’s Trump coin (TRUMP)—to the market.
This bold move comes with significant scrutiny, as DOGE and TRUMP are perceived as far less established and legitimate tokens compared to the likes of bitcoin or Ethereum’s ether (ETH). Unlike these cryptocurrencies that have tangible utility, meme coins derive their value solely from public perception and market hype, raising ethical questions about the implications of launching an ETF based on these volatile assets.
“Opinions vary greatly on the value of meme coins. I fail to see their long-term value, but others have different opinions,” stated James Angel, faculty affiliate at Georgetown University’s McDonough’s Psaros Center for Financial Markets and Policy. “However, a sponsor of an ETF based on meme coins needs to be very careful in the marketing of the ETF. It would be highly unethical to market such an ETF as a prudent investment vehicle.”
Steve McClurg, former CEO of Valkyrie and founder of Canary Capital, a hedge fund that has applied for several non-meme coin crypto ETFs, expressed his reservations. He remarked, “I don’t know how you can be a fiduciary who runs an ETF knowing that the basis of your underlying asset is meant and designed to go to zero.” While meme coins aren’t explicitly designed to collapse, their susceptibility to value loss once the hype fades is a cause for concern.
Despite these reservations, McClurg believes that memecoin ETFs will eventually gain approval. The SEC, under former Chair Gary Gensler, has already approved several spot bitcoin and Ethereum ETFs, but has yet to acknowledge a potential Solana (SOL) ETF, despite multiple initial documents filed.
Currently, there are over 30 other applications pending, including three related to meme coins. As McClurg emphasized, “It’s very hard for the SEC where the President chooses the commissioners to deny a meme coin put out by the President.”
Meme coins have long been a divisive subject within the crypto community. They are seen by some as entertaining and potentially lucrative for quick trades through short-term strategies, such as pump-and-dumps. Conversely, others view them with skepticism, especially when a sitting president is involved in their issuance.
“Call me old fashioned, but I think presidents should focus on running the country and not launching scam tokens,” said Nic Carter, a crypto influencer and venture capitalist, in a recent post. Carter, a vocal Trump supporter, further criticized the inherent conflicts of interest that arise when presidents engage in business ventures, let alone the creation of cryptocurrencies or decentralized finance protocols which they directly influence through policy.
In a politically charged climate, the implications of introducing meme coin ETFs must be carefully navigated, as the interests of investors and ethical standards in financial markets are put to the test.
