Grayscale Introduces Dogecoin Investment Fund Available to Institutional Investors
Grayscale Investments has recently launched the Grayscale Dogecoin Trust, a new investment fund that provides institutional investors with exposure to the popular meme coin. This trust, announced on January 31, offers a regulated avenue for investors to access DOGE, the leading memecoin by market capitalization.
According to the asset manager, Dogecoin is an open-source, peer-to-peer digital currency that is derived from Litecoin, which itself originated from Bitcoin.
It’s important to note that the trust is limited to institutional investors, allowing them to gain exposure to DOGE without the need to hold the asset directly. Unlike Bitcoin, Dogecoin operates on a proof-of-work (PoW) blockchain but with less computational demand for transaction verifications and no upper limit on supply. This unique feature distinguishes Dogecoin from many other digital assets.
Rayhaneh Sharif-Askary, the head of product and research at Grayscale, emphasized Dogecoin’s growth and stated that it has the potential to be a powerful tool for promoting financial accessibility.
Grayscale’s decision to introduce the Dogecoin Trust comes at a time when institutional interest in memecoins is on the rise. Historically, the memecoin sector has been dominated by retail traders. The launch of the Trump (TRUMP) memecoin on January 18, just before Donald Trump’s presidential inauguration, sparked a wave of speculation. This meme coin gained significant traction on the Solana network, causing network congestion for several days.
Following this surge, asset managers Osprey Funds and REX Shares filed to launch exchange-traded funds (ETFs) for DOGE, TRUMP, and Bonk (BONK) on January 21. This indicates that meme coins are increasingly being recognized as a serious asset class.
Grayscale continues to expand its range of single-asset crypto investment products with the introduction of the Dogecoin Trust. In recent months, the company has introduced funds for Lido (LDO), Optimism (OP), and Aave (AAVE). It has also identified over 35 altcoins, including Worldcoin (WLD), Pyth (PYTH), and Rune (RUNE), for potential future investment products.
As the largest crypto fund manager in the world, Grayscale currently oversees approximately $35 billion in assets as of December 2023. The company is renowned for its flagship Bitcoin and Ethereum investment trusts (GBTC and ETHE), which have played a significant role in institutional adoption of cryptocurrencies.
Grayscale’s latest filing coincides with a crucial period for the Securities and Exchange Commission (SEC) and cryptocurrency ETFs, following the resignation of SEC Chair Gary Gensler on January 20. Gensler, who was known for his cautious approach to crypto regulations, stepped down amid mounting pressure for clearer regulatory guidelines in the digital asset space.
Recently, Tuttle Capital Management filed applications for ten cryptocurrency-based leveraged ETFs, including funds tied to popular meme coins. Analysts believe that these filings are part of a broader strategy to test the boundaries of an SEC operating under crypto-friendly regulators from the Trump era.
The proposed ETFs include leveraged funds aiming to provide double the returns of their underlying assets, such as the meme coins Official Trump (TRUMP) and Melania Meme (MELANIA). Furthermore, Osprey Funds and REX Shares filed for meme coin ETFs covering Dogecoin (DOGE), Official Trump (TRUMP), and Bonk (BONK) on January 21.
In addition, the SEC has granted initial approval for Bitwise Asset Management’s Bitcoin and Ethereum ETF, which would track both BTC and ETH in a single fund.
