It is this time of the year! Internet memes are exploding with hype, and new memecoins are being sparked! From new tokens inspired by trending celebrities to those emerging from viral incidents, this specific corner of crypto is on fire!
Now, the fact is — memecoins have strongly clung to Wall Street. In simple words, memecoins are now tying knots with traditional financial structures or ETFs. It looks like memecoin Exchange-Traded Funds (ETFs) are likely to surge in numbers. The launch of the Dogecoin ETF (DOJE), the recent addition of the spot Trump Coin ETF (TRPC) to the Depository Trust and Clearing Corporation (DTCC), and the return of the Roundhill Meme Stock ETF — signal a shoot.
What’s driving memecoin ETF trend?
Crypto ETFs, or Exchange-Traded Funds, are moving the needle in the industry, paving the way for investing in coins without directly holding them.
To churn out some facts, nearly $440.7 million worth of Bitcoin and $69.1 million worth of Ethereum were bought on October 8. Global ETF inflows stand at $5.95 billion, while in the US, crypto ETF inflows have reached $29.4 billion.
This indicates a significant amount of money flowing in and out of the crypto ETF market. Amid this growth comes the notable entry of memecoin ETFs.
But how can memecoins, which are highly speculative, gain value through ETFs? And, why are they trending? Do they have good sides? Let’s check them out.
First crypto ETF makes waves
Remember back in October 2021, the first crypto ETF in the US — ProShares Bitcoin Strategy ETF (BITO)? This period in the crypto ignited the light for further ETFs, paving the way for future offerings, including those focused on memecoins.
Popularity turns into regulations
Memecoins sprout unexpectedly! They have huge online followers and trading volume. By packaging them into ETFs, financial institutions can join the hype in a more regulated and secure way.
Proper infrastructure is ready
Popular ETF issuers or institutions like Canary Capital and Rex Osprey are now in place. Custodians like Gemini Trust Company and BitGo, and exchanges like NYSE and NASDAQ are also very much in play.
High attention = High liquidity
Memecoins explode on social media buzz! Gen Zs and digital natives are taking charge of the internet stage. Now, connect the dots…..More investors are jumping into memecoin ETFs.
Convenience for investors
No wallets or keys to access ETFs. Low barriers make people buy meme assets via traditional brokerage.
Regulated ETFs mean security
It is quite clear that memecoins are typically risky and hype-driven assets. Bringing regulatory oversight to the wild nature of assets like memecoins protects them from market manipulations, scams, or sudden exchange failures.
Irony and optimism: Are experts chiming in on ETFs?
Industry experts have spoken out about memecoin ETFs, where top voices referred to such products as ‘casino-type speculation’.
Bloomberg analyst Eric Balchunas sees both constraints and possibilities in memecoin ETFs. Earlier, he predicted that the first memecoin ETF could arrive by 2026.
For Bryan Armour, analyst at Morningstar, an investment research firm, memecoin ETFs are skeptical. He once noted: “We’re shifting away from the aim of capital markets. Such a speculative instrument may make extra sense in an online casino than in an inventory market”.
The analyst compares memecoin ETFs to gambling tools that fit more for a casino than a stock.
He also zeroed in on such investment products that could mislead investors about their legitimacy — especially the newbies.
The memevolution continues
Born out of jokes, memes, real incidents, and lighthearted moments, memecoins carry intrinsic traits — they are speculative, funny, and risky! But then come ETFs, serving as a buffer that disconnects memecoins from their highly speculative nature. Not exactly to disconnect them, but to decouple direct price exposure from price, allowing investors to avoid facing the full volatility.
Although regulated, memecoin ETFs continue to spark discussions within the crypto community — why should something that emerged as a joke be involved in capital markets?
