1. Introduction

In recent years, the cryptocurrency market has shown rapid development and gradually gained a foothold in the global financial sector. Bitcoin, as a pioneer of cryptocurrencies, has opened a new era of decentralized digital currency since its birth in 2009. Subsequently, various cryptocurrencies such as Ethereum have emerged like mushrooms after rain, each attracting a large number of investors' attention with their unique technologies and application scenarios. According to CoinMarketCap data, by the end of 2024, the total market value of global cryptocurrencies has exceeded 20 trillion US dollars, covering thousands of different types of digital currencies, and its market size and influence are growing day by day.

Dogecoin, as a meme-based cryptocurrency, was launched in 2013. Initially appearing with a light-hearted and humorous image, its logo is a cute Shiba Inu, aiming to provide users with a convenient and fun means of small-value payment. Despite its origin as a joke, with its unique community culture and strong social media influence, Dogecoin has quickly accumulated a large number of users globally. Especially in 2021, Tesla CEO Elon Musk mentioned and promoted Dogecoin multiple times on social media, leading to a remarkable price surge, at one point ranking among the top cryptocurrencies by market capitalization, becoming an important force in the cryptocurrency market that cannot be ignored.

Meanwhile, Exchange Traded Funds (ETFs), as a type of open-end fund traded on stock exchanges, are favored by investors for their convenience, relatively low costs, and portfolio diversification advantages. ETFs in traditional financial markets have matured considerably, covering various areas such as stocks, bonds, commodities, and more. Cryptocurrency ETFs, serving as a bridge between traditional finance and the emerging cryptocurrency market, have gradually become a focus of market attention. Cryptocurrency ETFs allow investors to indirectly invest in cryptocurrencies through traditional securities trading channels at relatively low thresholds, providing investors with a more convenient and compliant investment method. They are expected to attract more capital from traditional financial markets into the cryptocurrency sector.

LogingateTrade platform, you can trade DOGE:https://www.gate.io/trade/DOGE_USDT

2, Overview of Dogecoin

The Birth and Development of Dogecoin 2.1

Dogecoin was born on December 8, 2013, created by Australian brand and marketing expert Jackson Palmer and programmer Billy Markus from Portland, Oregon, USA. Its origin is quite interesting, as Jackson Palmer was inspired by the fervor in the cryptocurrency market at the time and the popular internet meme 'Doge' to registerDogecoin.comThe domain name, and promoted tweets on Twitter, aroused the attention of programmer Billy Markus, and the two hit it off, deciding to create a new cryptocurrency based on the Scrypt algorithm, aiming to provide users with an easy, fun, and convenient means of small-value payment, which is the embryonic form of Dogecoin.

At first, Dogecoin was seen as a humorous cryptocurrency project, with its unlimited total and its characteristics based on meme culture differing from the mainstream cryptocurrency concept of pursuing value storage and decentralization at that time. However, it was this unique positioning that caused Dogecoin to spread rapidly within the internet community. It first gained a large number of users' favor on social platforms such as Reddit and Twitter, and was widely used for tipping, micro-payments, and other scenarios, gradually forming an active community culture.

In 2014, the Dogecoin Foundation was officially registered and approved by the U.S. Securities and Exchange Commission, providing a certain organizational guarantee and planning guidance for the development of Dogecoin. As a non-profit organization, the Dogecoin Foundation is dedicated to supporting the development, popularization, and trademark protection of Dogecoin. Under its promotion, the application scenarios of Dogecoin continue to expand. By June 9, 2015, Dogecoin's market value reached 100 million, with 1.6 million client addresses and a long-term daily trading volume ranking among the top three in virtual currencies. The user base reached one-third of Bitcoin's within a year, four times that of Litecoin. It gained 1.7 times more attention on international Twitter than Bitcoin and 6 times more than Litecoin. The number of Facebook likes is on par with Bitcoin and far exceeds Litecoin, demonstrating strong development potential and community influence.

In the following years, the development of Dogecoin was not smooth sailing. During the period from 2018 to 2020, the overall cryptocurrency market was relatively sluggish, and Dogecoin's price and market value were also affected to some extent. However, in July 2020, with the resurgence of the cryptocurrency market and renewed attention from social media, Dogecoin's trading volume increased, and its price more than doubled, re-entering the public eye.

2021 can be described as a highlight in the development of Dogecoin. Tesla CEO Elon Musk has mentioned and promoted Dogecoin multiple times on social media, greatly driving its price. In April 2021, Musk stated that he would send the words 'Dogecoin' to the moon via a SpaceX spacecraft. This news directly led Dogecoin to reach a historical high of 67 cents, with a market value briefly ranking among the top cryptocurrencies at $85.3 billion, a cumulative increase of 1923 times, becoming the second largest cryptocurrency globally in terms of user numbers, just behind Bitcoin. However, with the fluctuation of Musk's remarks and market adjustments, Dogecoin's price has also experienced drastic ups and downs, demonstrating its high sensitivity to celebrity effects and market sentiment.

In recent years, Dogecoin has been exploring new development directions while maintaining its traditional applications such as small payments and rewards. It actively collaborates with some enterprises and institutions to expand its applications in online shopping, charitable donations, and other fields, aiming to enhance its practicality and value. At the same time, the Dogecoin community continues to grow, with developers continuously optimizing and improving its technology to enhance network performance and security, laying a solid foundation for the long-term development of Dogecoin.

2.2 Technical Features of Dogecoin

1. Based on the Scrypt algorithm: Dogecoin uses the Scrypt algorithm for mining, which is a memory-dependent proof-of-work algorithm with different characteristics compared to the SHA-256 algorithm used by Bitcoin. The Scrypt algorithm requires a large amount of memory resources during the calculation process, making the mining difficulty highly demanding on the memory performance of hardware devices. This to some extent prevents the large-scale monopoly of professional mining equipment (ASIC miners), lowers the threshold for mining, and allows ordinary home computers to participate in mining, thus maintaining the decentralized nature of mining. For example, in the early development of Dogecoin, many ordinary users used their own computers for mining, forming a relatively decentralized mining network and promoting the development of its community.
2. Fast transaction speed: Dogecoin's average transaction confirmation time is about 1 minute, compared to around 10 minutes for Bitcoin, which significantly improves transaction speed. This makes Dogecoin have a clear advantage in scenarios such as small payments and tipping, being able to quickly complete transactions to meet users' instant payment needs. For example, on social media platforms, users can quickly use Dogecoin to tip content they like without the need to wait for a long time for transaction confirmation, thus improving user experience and fund circulation efficiency.
3. Low fees: Another major feature of Dogecoin is its low transaction fees. Due to its fast transaction speed and focus on small-value payment scenarios, Dogecoin's fees are usually very low, often less than a penny. This allows users to conduct small transactions without worrying about high fees, reducing transaction costs and further promoting its use in daily small-value payment scenarios. For example, on some online gaming platforms, players using Dogecoin to purchase in-game items or services benefit from the low fees, making transactions more cost-effective and attracting more players to use Dogecoin for transactions.
4. Unlimited Total Supply: Unlike the fixed supply of 21 million bitcoins, Dogecoin has a total supply of 100 billion since its 2013 issuance, with an additional 5 billion issued annually. This unlimited supply characteristic gives Dogecoin a certain degree of inflation, which differs from the traditional concept of scarce currency. From a positive perspective, it ensures Dogecoin's ample supply in the market to meet the growing transaction demand. However, on the other hand, it may also affect its attribute as a long-term value storage tool, as the continuous increase in quantity over time may pose certain challenges to its value stability.
5. Consensus Mechanism: Dogecoin uses the Proof of Work (POW) consensus mechanism, which is a relatively traditional and widely used consensus mechanism. Under the POW mechanism, miners compete for the right to record transactions by solving complex mathematical problems. The first miner to find the correct answer will gain the right to record a new block and receive the corresponding Dogecoin reward. This mechanism ensures the security and decentralization of the blockchain through computational competition. To tamper with the transaction records on the blockchain, an attacker would need to control more than 51% of the network's computational power, which is extremely costly and difficult in practice. However, the POW mechanism also has some drawbacks, such as high energy consumption. As the computational power of the Dogecoin network continues to grow, the energy cost of mining is also gradually increasing.

The market performance and price trend of 2.3 Dogecoin

Since its inception, Dogecoin has experienced dramatic and volatile market performance and price trends. From its early days as a niche, humorous cryptocurrency to becoming a global focal point driven by social media and celebrity effects, Dogecoin's price has undergone multiple significant fluctuations.

In 2013-2014, shortly after Dogecoin was launched, due to its unique meme culture and novel concept, it attracted the attention of some early cryptocurrency enthusiasts, and the price began to rise to a certain extent. However, as the market hype gradually cooled down, the price also fell back, entering a period of relatively stable development.

In 2015-2017, the cryptocurrency market as a whole showed a bull market trend, with a significant increase in Bitcoin prices, driving the prosperity of the entire cryptocurrency market. Dogecoin also benefited from this bull market, with prices and market value steadily rising. Especially at the end of 2017, when the price of Bitcoin reached a historic high, the market's enthusiasm for cryptocurrency investment soared, and Dogecoin's price also rose, attracting more investors' attention.

From 2018 to 2020, the cryptocurrency market entered a bear market, with Bitcoin prices falling significantly, casting a gloomy atmosphere over the entire market. Dogecoin was not spared either, with prices continuing to decline and market capitalization shrinking significantly. During this period, Dogecoin's price fluctuations were relatively small, but overall in a downward channel, leading to a certain blow to investor confidence.

In 2020-2021, with the changing global economic situation and the gradual recognition of cryptocurrencies by institutional investors, the cryptocurrency market has once again ushered in a bull market. Dogecoin, promoted by tweets from celebrities like Musk, became a market hot spot. From February to May 2021, the price of Dogecoin quickly soared from less than 0.01 US dollars to around 0.67 US dollars, an increase of more than 60 times. Its market value also increased significantly, ranking among the top cryptocurrencies at one point. However, this rapid rise was mainly influenced by market sentiment and celebrity effects, lacking solid fundamental support. Subsequently, the price began to sharply correct, dropping by over 70% in just a few months, demonstrating the high volatility of its price.

In recent years, the price of Dogecoin has continued to fluctuate within a relatively large range. The market's attitude towards Dogecoin is gradually becoming more rational, and the price trend is not only influenced by market sentiment and social media dynamics but also increasingly by a combination of factors such as the expansion of its actual application scenarios, technological development, and macroeconomic environment. Figure 1 shows the price trend of Dogecoin from 2020 to 2024, clearly illustrating the significant price fluctuations. At the beginning of 2020, the price was relatively low, but with the resurgence of market enthusiasm and Musk's first mention, the price began to gradually rise. After reaching a historical high point in 2021, it experienced multiple significant corrections and rebounds. During 2022-2023, the price fluctuated within a certain range, reflecting significant differences in the market's valuation of Dogecoin.

The market performance and price trend of Dogecoin fully reflect the high risk and uncertainty of the cryptocurrency market. Its price is influenced not only by internal factors such as its own technical characteristics and application scenarios, but also by a combination of external factors such as market sentiment, celebrity effects, macroeconomic policies, and regulatory environment. Investors need to fully understand these risks when participating in Dogecoin investments.

3. ETF basic concepts and the current development of cryptocurrency ETFs

3.1 Definition, characteristics and operation mechanism of ETF

ETF, which stands for Exchange Traded Fund, is a type of open-end fund traded on a stock exchange, combining the characteristics of closed-end and open-end funds. It constructs a portfolio of securities that tracks the index by replicating the underlying index, allowing investors to trade a basket of securities by buying and selling a single product. For example, when investors buy the CSI 300 ETF, they are indirectly investing in the 300 constituent stocks of the CSI 300 index, enabling them to easily track the performance of the CSI 300 index.

ETF has the following prominent features:

1. Convenient trading: ETFs can be bought and sold on stock exchanges like stocks, with trading hours aligned with the stock market. Investors can buy and sell at any time during trading days, with a simple and fast trading process, enabling them to seize market opportunities promptly. Taking a technology-themed ETF as an example, when the market expects the technology sector to perform well, investors can quickly buy into the ETF to share the dividends of the technology industry.
2. Lower Costs: Compared to actively managed funds, ETFs generally have lower management fees. This is because ETFs mainly adopt a passive investment strategy, tracking specific indices, without the need for frequent active stock selection and trading decisions by fund managers, thus reducing management costs. For example, the management fee of some broad-based index ETFs may be as low as 0.1% - 0.5%, much lower than the management fees of around 1% - 2% for actively managed stock funds.
3. Diversification of investment risks: By investing in a basket of securities, ETF effectively diversifies the risk of individual securities. Taking the CSI 500 ETF as an example, its portfolio includes 500 small and medium-sized stocks, covering multiple industries and sectors. Even if some of the stocks perform poorly, the impact on the net asset value of the entire fund is relatively limited, reducing the risk associated with fluctuations in individual stocks.
4. High Transparency: The investment portfolio of ETFs is usually configured entirely according to the constituents of the tracked index, allowing investors to have a clear understanding of the fund's investment direction and asset distribution. Fund companies publish the ETF's list of purchases and redemptions daily, enabling investors to accurately know the types and quantities of securities held by the ETF, facilitating investment decisions.

The operation mechanism of ETF involves the primary market and the secondary market. In the primary market, investors can subscribe for ETF shares with a basket of stocks (or cash equivalents) to the fund management company, or redeem ETF shares for a basket of stocks (or cash equivalents). This subscription and redemption mechanism ensures that the net asset value of the ETF is closely linked to the market price. When there is a deviation between the ETF market price and the net asset value, arbitrageurs can conduct arbitrage operations through subscription and redemption in the primary market and buying and selling in the secondary market to bring the ETF price back to the net asset value. In the secondary market, ETF shares are listed and traded on the stock exchange like stocks. Investors can buy and sell ETF shares according to market conditions, and the trading price is determined by market supply and demand.

3.2 Development History and Current Situation of Global Cryptocurrency ETFs

The development process of cryptocurrency ETF is the gradual integration of traditional financial markets with the emerging cryptocurrency field, influenced by various factors such as technological development, market demand, and regulatory policies, experiencing multiple important stages.

1. In the exploratory phase: In 2013, the Winklevoss brothers submitted the first Bitcoin ETF application in the United States, marking the concept of cryptocurrency ETF entering the public view. At that time, the cryptocurrency market was in its early stages of development, and digital currencies such as Bitcoin gradually attracted attention. However, regulatory agencies' attitudes towards cryptocurrencies were not clear, cryptocurrency prices fluctuated dramatically, and the market infrastructure was not yet perfect. These factors led to the repeated rejection of Bitcoin ETF applications by the U.S. Securities and Exchange Commission (SEC) in the following years. The market was in the exploratory phase of the possibility of cryptocurrency ETFs, with attempts but slow progress.
2. Initial Development Period: 2021 is an important turning point for the development of cryptocurrency ETFs. In that year, the first Bitcoin ETF in North America was approved in Canada, and in October of the same year, the first Bitcoin futures ETF in the United States was approved for listing and trading. With the continuous expansion of the cryptocurrency market, more and more investors are becoming interested in cryptocurrency investments, and traditional financial institutions have also begun to actively layout cryptocurrency-related businesses. Canada is relatively open in the approval of cryptocurrency ETFs, pioneering the approval of Bitcoin ETFs, providing an example for the global development of cryptocurrency ETFs. The approval of Bitcoin futures ETFs in the United States, although based on futures contracts rather than direct investment in Bitcoin spot, also provides investors with a way to indirectly participate in the cryptocurrency market, indicating the initial development of cryptocurrency ETFs on a global scale.
3. Rapid Growth Period: On January 10, 2024, the SEC approved the listing and trading of 11 Bitcoin spot ETFs, marking a milestone event in the cryptocurrency market. This approval signifies a broader acceptance of Bitcoin in the traditional financial system, with a significant amount of funds flowing into Bitcoin spot ETFs. According to data compiled by Bloomberg, the 11 approved ETF products completed 700,000 individual trading transactions on the first day, with a total trading volume exceeding $46 billion. Subsequently, the cryptocurrency ETF market has shown a rapid growth trend, with more and more financial institutions launching various types of cryptocurrency ETFs covering mainstream cryptocurrencies such as Bitcoin, Ethereum, etc. The product types have also become more diversified, including physically-backed ETFs, futures ETFs, and actively managed ETFs. By the end of July 2024, the total assets of listed cryptocurrency ETFs and ETPs (Exchange Traded Products, including ETFs and similar products) globally have reached $916.9 billion, a staggering 506.4% increase compared to $151.2 billion at the end of 2023, showing strong growth momentum.

In terms of regional distribution, the United States is currently the most important market for cryptocurrency ETFs globally. The United States has a mature financial market and a large investor base. Its approval of measures such as Bitcoin spot ETF has attracted a large amount of capital inflow globally. In addition, Canada, some European countries, as well as Japan and Thailand in Asia, are actively promoting the development of cryptocurrency ETFs. Canada started early in the field of cryptocurrency ETFs and has approved multiple Bitcoin and Ethereum ETFs; Japan is actively promoting the use of Bitcoin and Ethereum for ETFs, with institutions including Mitsubishi UFJ Trust and Nomura Securities proposing to consider including Bitcoin and Ethereum in the scope of cryptocurrency ETFs; the Securities and Exchange Commission of Thailand has approved the first spot Bitcoin exchange-traded fund launched by One Asset Management, mainly targeting wealthy institutional investors.

3.3 Bitcoin, Ethereum and other mainstream cryptocurrency ETF case analysis

1. Bitcoin ETF: On January 10, 2024, the U.S. SEC approved the listing and trading of 11 Bitcoin spot ETFs, which had a profound impact on the cryptocurrency market. From the market reaction, the price of Bitcoin experienced significant fluctuations before and after the approval. Driven by the expectation of approval, the price of Bitcoin rose from around $17,000 in January 2023 to around $46,000 after approval. On January 11, the price of Bitcoin briefly exceeded $49,000. This indicates that the market is optimistic about the approval of Bitcoin spot ETFs, believing that it will bring more fund inflows and higher market acceptance to the Bitcoin market. However, on the second day of ETF listing, the price of Bitcoin quickly fell from above $46,000, dropping below $42,000 at one point, with a single-day decline of over 8.3%. This is mainly due to the phenomenon of 'buy the rumor, sell the fact' in the market. After the approval news was announced, some investors chose to take profits, leading to a price correction. In terms of fund inflows, the 11 Bitcoin spot ETFs were well received after listing, with a trading volume exceeding $4.6 billion on the first day. Among them, the trading volume of the Grayscale Bitcoin Trust Fund (GBTC) converted ETF was about $2.3 billion, and BlackRock's iShares Bitcoin Trust (IBIT) had a trading volume of over $1 billion. This shows strong interest from institutional and retail investors in Bitcoin ETFs, with a significant amount of funds flowing into Bitcoin ETFs, injecting new vitality into the Bitcoin market.
2. Ethereum ETF: On July 22, 2024, the U.S. SEC approved the listing of the Ethereum spot ETF for trading, marking another significant event following the approval of the Bitcoin spot ETF. Ethereum, as the second largest cryptocurrency by market capitalization, the listing of its spot ETF is of great significance. In terms of price impact, Ethereum's price had already risen by about 30% within a week after the approval news was announced. Market analysts generally believe that the listing of the ETF will further increase Ethereum's market liquidity and investment value, attracting more investors to enter. According to Bloomberg ETF analyst Eric Balchunas, the trading volume of the spot ETH ETF group reached $112 million in the first 15 minutes of trading, which is a huge volume compared to the issuance of regular ETFs, but only equivalent to half of the trading volume on the first day of the BTC ETF group (excluding GBTC). Large market maker Wintermute expects that the Ethereum ETF can attract a maximum of $4 billion in capital inflows from investors in the next year. Although the scale of capital inflows into the Ethereum ETF is expected to be smaller than that of the Bitcoin ETF, it still brings new funds and attention to the Ethereum market, helping to enhance Ethereum's recognition in the traditional financial market and promote the development of the Ethereum ecosystem.

4. The current development status of Dogecoin ETF

Progress of the Dogecoin ETF application 4.1

In recent years, as the cryptocurrency market develops and investors' demand for diversified investment tools increases, the application for Dogecoin ETF has gradually become the focus of the market. Many well-known financial institutions and asset management companies have successively submitted applications for Dogecoin ETF, trying to take the lead in this emerging field.

On January 22, 2025, Bitwise filed with the state of Delaware to register the Bitwise Dogecoin ETF. However, Bloomberg ETF analyst James Seyffart stated that this is just a trust registration and not yet the formal ETF filing submitted to the SEC. Subsequently, in February, Bitwise Asset Management officially submitted the S-1 registration application for the DOGECOIN ETF to the U.S. Securities and Exchange Commission (SEC), marking a significant step forward in its efforts to promote the listing process for the Dogecoin ETF.

Around the same time, Grayscale was also actively positioning itself in the Dogecoin ETF space. By the end of January 2025, Grayscale announced the launch of a trust fund tracking the performance of meme coins, providing institutional and retail investors with access to a closed-end trust. Subsequently, Grayscale submitted a 19b-4 application to the U.S. Securities and Exchange Commission (SEC) via the New York Stock Exchange (NYSE), planning to convert the recently launched Dogecoin Trust into an ETF. The U.S. Securities and Exchange Commission (SEC) has formally accepted the New York Stock Exchange ARCA's filing regarding the Grayscale Dogecoin Trust, marking the beginning of the regulatory review process and opening a 21-day public comment period for the application.

In addition to Bitwise and Grayscale, institutions such as Osprey Funds and RexShares have also filed applications for DOGECOIN ETF, demonstrating strong market interest and competitive dynamics for Dogecoin ETF. However, as of now, the SEC has not made a final approval decision on any Dogecoin ETF applications. During the approval process, the SEC typically conducts a comprehensive review of the applications, evaluating various aspects including the stability of the cryptocurrency market, investor protection measures, market manipulation risks, and the compliance of relevant institutions. Based on past experiences with cryptocurrency ETF approvals, this process may take a long time and involve a certain level of uncertainty. For example, the approval of Bitcoin ETF took several years and multiple applications and reviews before finally being approved. The approval of Dogecoin ETF may also face similar complex procedures and strict scrutiny.

4.2 The main institutions and their motivations for applying for Dogecoin ETF

1. Grayscale: As a globally renowned digital asset investment company, Grayscale has a wide influence in the cryptocurrency field. Its application for a Dogecoin ETF is mainly motivated by the following reasons: first, strategic considerations for market layout. Grayscale has been committed to building a diversified portfolio of cryptocurrency investment products, with Bitcoin Trust (GBTC) and Ethereum Trust (ETHE) having achieved certain success in the market. By applying for a Dogecoin ETF, Grayscale can further expand its product line, meet the diverse needs of different investors in cryptocurrency investment, and consolidate its leading position in the field of cryptocurrency asset management. Second, responding to market demand. Dogecoin, with its unique meme culture and massive community support, has a large number of fans and investors in the cryptocurrency market. By launching a Dogecoin ETF, Grayscale can provide these investors with a more convenient and compliant investment channel, attract more funds inflow, and thereby obtain management fees and investment returns.
2. Bitwise: Bitwise Asset Management is a company focused on cryptocurrency index and asset management. Its application for Dogecoin ETF has clear motivations. On the one hand, it is to meet investors' demand for investing in emerging cryptocurrencies. With the continuous development of the cryptocurrency market, investors' demand for potential investments in cryptocurrencies other than mainstream ones like Bitcoin and Ethereum is gradually increasing. As a cryptocurrency with high popularity and market attention, launching its ETF by Bitwise can provide investors with a new investment option, enrich the investment portfolio, and reduce investment risks. On the other hand, by applying for Dogecoin ETF, Bitwise can further enhance the company's innovative image and market competitiveness in the field of cryptocurrency asset management. In the competitive cryptocurrency financial services market, continuously launching new investment products is an important means to attract clients and funds, helping Bitwise stand out in the industry and attract more institutional and retail investors.
3. Other institutions: Institutions such as Osprey Funds and RexShares have applied for a Dogecoin ETF, with the main motivation being to gain a foothold in the emerging cryptocurrency ETF market. As the cryptocurrency market gradually moves into the mainstream financial landscape, the cryptocurrency ETF market has enormous potential for development. These institutions hope to share the dividends of market growth by laying out Dogecoin ETF in advance. In addition, meeting the diverse investment needs of clients is also one of the important reasons. Different clients have different preferences and demands for investment products, offering a Dogecoin ETF can enrich the institution's product range, better serve clients, and enhance client stickiness and loyalty.

4.3 Dogecoin ETF application facing regulatory scrutiny focus

1. Regulatory Compliance: The SEC's primary focus is on whether the applying institution strictly complies with US securities regulations. The Dogecoin ETF involves the field of cryptocurrencies, and the regulatory framework for cryptocurrencies is still being continuously improved globally, with the US being no exception. The applying institution needs to demonstrate that all aspects of its ETF product, such as operation mode, trading process, custody arrangements, etc., comply with the relevant regulations of the US Securities and Exchange Commission, ensuring transparency and standardization of transactions. For example, in terms of custody, a reliable custodian institution is needed to safeguard Dogecoin assets to prevent asset loss or theft, and the qualifications and operational processes of the custodian institution need to meet SEC requirements.
2. Market manipulation risk: Dogecoin prices have been heavily influenced by social media and celebrity effects in the past, showing significant volatility and indicating potential market manipulation risks. The SEC will focus on reviewing preventive measures against market manipulation risks in ETF applications. Applying institutions need to provide detailed market monitoring plans, explaining how to identify and prevent market manipulation behaviors, such as real-time monitoring of trading data, early warning of abnormal trading behavior, etc., to ensure the fair, just, and orderly operation of the Dogecoin ETF market and protect investors from losses caused by market manipulation.
3. Investor Protection: Protecting investor interests is one of the core goals of SEC regulation. For Dogecoin ETF applications, the SEC will review whether investor education and risk disclosure measures are sufficient. Due to Dogecoin's high volatility and uncertainty, investors may face significant investment risks. Applying institutions need to fully disclose the risks of investing in Dogecoin ETFs to investors, including market risks, price fluctuation risks, technical risks, and risks of regulatory policy changes, to ensure that investors make investment decisions based on a full understanding of the risks. At the same time, it is also necessary to provide investors with educational materials and channels to help them better understand cryptocurrency and ETF-related knowledge, enhance investors' risk awareness, and investment capabilities.
4. Cryptocurrency market stability: As part of the cryptocurrency market, the launch of Dogecoin ETF may have an impact on the overall stability of the cryptocurrency market. The SEC will evaluate whether the listing of Dogecoin ETF will trigger excessive market fluctuations or systemic risks. This requires applying institutions to provide a market impact analysis report, explaining the potential impact of ETF listing on Dogecoin price, trading volume, and the entire cryptocurrency market, and proposing corresponding risk response measures to maintain the stable and healthy development of the cryptocurrency market.

5, Market Impact of Dogecoin ETF

5.1 Potential Impact on Dogecoin Price

1. Changes in supply and demand: From the perspective of demand, the approval and listing of Dogecoin ETF will provide investors with a more convenient and compliant investment channel. This will attract a large number of investors who were previously unable to invest directly in Dogecoin due to high investment thresholds, complex trading processes, or a lack of understanding of the cryptocurrency market, including institutional investors and individual investors in traditional financial markets. Taking the market performance after the approval of Bitcoin ETF as an example, a large amount of funds flowed in after the listing of Bitcoin ETF, driving a significant short-term increase in the price of Bitcoin. The launch of Dogecoin ETF may also trigger a similar influx of funds, significantly increasing the market demand for Dogecoin. From the supply side, although there is no upper limit to the total amount of Dogecoin, its circulation is relatively stable in the short term. The sharp increase in new demand, while the supply is difficult to adjust rapidly in the short term, will disrupt the original supply-demand balance. According to the law of supply and demand, the situation of insufficient supply to meet demand will drive up the price of Dogecoin.
2. Change in investor structure: The emergence of the Dogecoin ETF will prompt a change in investor structure. Previously, Dogecoin's investors were mainly early participants in the cryptocurrency field, retail investors, and individuals influenced by social media, with relatively dispersed investment behavior and susceptible to market sentiment. After the ETF is listed, the participation of institutional investors will significantly increase. Institutional investors typically have more professional investment teams, more sophisticated investment strategies, and stricter risk control systems. Their investment decisions are often based on in-depth analysis of market fundamentals, macroeconomic environment, and the long-term value of the investment target. The entry of institutional investors will bring more rational investment strength to the Dogecoin market, reducing irrational fluctuations in the market. At the same time, the substantial inflow of funds from institutional investors will also enhance Dogecoin's position and influence in the financial market, further attracting more investor attention and participation, exerting a positive support effect on Dogecoin prices.
3. Market expectations and sentiment impact: The approval of the Dogecoin ETF itself will have a significant impact on market expectations and investor sentiment. When the market expects the imminent approval of the Dogecoin ETF, investors will have a more optimistic outlook on the future value of Dogecoin. This optimism will prompt them to buy Dogecoin in advance, driving up the price. Once the ETF is officially approved for listing, the market will further confirm the legitimate status and investment value of Dogecoin in the traditional financial market, enhance investor confidence, attract more investors to buy in, and create a virtuous cycle of price increases. However, if the market's expectations for the Dogecoin ETF are too high and its actual performance after listing fails to meet expectations, such as lower-than-expected fund inflows or a lack of market trading activity, it may lead to a reversal in investor sentiment and trigger a price correction. In addition, continued attention and discussion of the Dogecoin ETF in the market may make Dogecoin prices more susceptible to the impact of related news, such as ETF subscription and redemption situations, changes in asset size, and price fluctuations may intensify.

5.2 The impact on the overall layout of the cryptocurrency market

1. Promoting the mainstreaming of cryptocurrencies: If the Dogecoin ETF is approved for listing, it will further promote the mainstream development of cryptocurrencies. ETF, as an investment tool widely accepted in traditional financial markets, introduces cryptocurrencies into the traditional securities trading channels, making them more visible to a wider range of investors. This not only lowers the threshold for investors to participate in cryptocurrency investment, but also gains more recognition and legitimacy for cryptocurrencies in the traditional financial system. For example, the listing of Bitcoin ETF is considered an important milestone for cryptocurrencies entering the mainstream financial market, attracting a lot of attention and participation from traditional financial institutions and investors. The launch of Dogecoin ETF will continue this trend, allowing more ordinary investors to invest in cryptocurrencies through familiar securities trading platforms, promoting the deep integration of cryptocurrencies with traditional financial markets, and accelerating the popularization and application of cryptocurrencies in the global financial system.
2. Impact on market competition: Within the cryptocurrency market, the emergence of Dogecoin ETF will change the market competition landscape. Dogecoin, as a cryptocurrency with a unique community culture and a wide user base, will attract more funds and enhance its position and influence in the cryptocurrency market with the listing of its ETF. This may create competitive pressure on other cryptocurrencies, especially similar meme coins, leading to capital flowing from other meme coins to Dogecoin. At the same time, the successful listing of Dogecoin ETF may also trigger other cryptocurrency projects to accelerate ETF applications, intensifying market competition. For example, after the approval of Bitcoin ETF, mainstream cryptocurrencies like Ethereum have followed suit in applying for ETFs, forming a competitive situation in the cryptocurrency ETF market. This competition will prompt various cryptocurrency projects to continuously improve their technical strength, expand application scenarios, and enhance market compliance to attract more investors and funds, driving innovation and development in the entire cryptocurrency market.
3. Increasing Market Volatility and Correlation: The listing of Dogecoin ETF may increase the volatility of the cryptocurrency market. On the one hand, as mentioned earlier, the convenience of ETF trading and market attention may attract a large number of investors to participate, leading to rapid inflows and outflows of funds, thereby exacerbating the fluctuation of Dogecoin prices and thus affecting the entire cryptocurrency market. On the other hand, the close connection between Dogecoin ETF and traditional financial markets makes it more susceptible to the impact of macroeconomic environment, monetary policy, and fluctuations in traditional financial markets. When traditional financial markets experience significant fluctuations, through the bridge of ETF, it may trigger a chain reaction in the cryptocurrency market, increasing market uncertainty. At the same time, the listing of Dogecoin ETF may also enhance the correlation between the cryptocurrency market and traditional financial markets. When investors allocate assets, they will include Dogecoin ETF in their portfolios, conducting associated analysis and allocation adjustments with traditional financial assets, thereby increasing the correlation between the cryptocurrency market and traditional financial markets in terms of fund flows, price trends, and other aspects.

5.3 Impact on Investors and Analysis of Investment Opportunities

1. Improved Investment Convenience: Dogecoin ETF provides investors with a more convenient way to invest. Traditional Dogecoin investment requires investors to open an account on a cryptocurrency exchange, undergo complex identity verification, fund transfers, etc., and may face risks such as network security and exchange platform risks during the trading process. With Dogecoin ETF, investors only need to have a regular securities account on a stock exchange to buy and sell ETF shares like stocks, making the trading process simple and convenient, significantly reducing the investment threshold. For example, investors can place orders to buy or sell Dogecoin ETF anytime during stock trading hours without worrying about the trading time restrictions and technical issues of cryptocurrency exchanges, improving investment flexibility and efficiency.
2. Risk and Return Analysis: Investing in Dogecoin ETF brings potential opportunities for returns, accompanied by certain risks. From a return perspective, if the price of Dogecoin rises, investors can benefit from holding Dogecoin ETF and share the gains from the price increase. As mentioned earlier, the approval of the ETF may drive up the price of Dogecoin, leading to capital appreciation for investors. In addition, some Dogecoin ETFs may offer forms of income such as dividends, increasing investor returns. However, investing in Dogecoin ETF also entails various risks. First is market risk, as the price of Dogecoin is highly volatile and can be significantly affected by various factors such as market supply and demand, macroeconomics, regulatory policies, and social media, leading to substantial price declines and potential asset losses for investors. Secondly, there is regulatory risk, as the regulatory policies in the cryptocurrency market are not yet perfect and are subject to uncertainty. Changes in regulatory policies may have a significant impact on the operation and investment value of Dogecoin ETFs, such as changes in SEC's regulatory requirements for ETFs, and strengthening measures to restrict the cryptocurrency market. Furthermore, there are risks associated with the ETF itself, including fund management risks and tracking error risks. Errors in fund managers' investment decisions and inaccurate tracking of Dogecoin prices by the ETF may affect investor returns.
3. Portfolio Allocation Opportunity: The Dogecoin ETF provides investors with a new choice for portfolio allocation. In modern portfolio theory, diversifying investments across different asset classes can reduce portfolio risk and enhance returns. Dogecoin, as an asset with low correlation to traditional financial assets, including Dogecoin ETF in the portfolio can effectively diversify risk and optimize the risk-return characteristics of the portfolio. For traditional stock and bond investors, appropriately allocating Dogecoin ETF can increase portfolio diversification, to some extent, offsetting the risks brought by fluctuations in traditional financial markets. At the same time, for cryptocurrency investors, Dogecoin ETF also offers a more convenient and relatively risk-controlled investment method, compared to directly investing in Dogecoin, investing through ETFs can better diversify risks and achieve reasonable asset allocation.

6, Investment Risks of Dogecoin ETF

6.1 Policy Regulatory Risk

Regulatory policies on cryptocurrencies vary significantly across countries globally and are still incomplete, which poses a high policy regulatory risk to Dogecoin ETF. In the United States, although Bitcoin and Ethereum spot ETFs have been approved for listing, regulatory agencies still maintain a cautious stance towards the cryptocurrency market. The U.S. Securities and Exchange Commission (SEC) will focus on regulatory compliance, market manipulation risks, investor protection, and cryptocurrency market stability when reviewing the Dogecoin ETF application. If the SEC finds shortcomings in these areas regarding the Dogecoin ETF, it may reject the application, leaving investors' investment plans in Dogecoin ETF in jeopardy, and the invested funds may also face liquidity and value decline risks.

In other countries and regions, regulatory policies are equally complex and ever-changing. Some countries have adopted relatively lenient regulatory policies towards cryptocurrencies, allowing for the development of cryptocurrency-related businesses, but also imposing many restrictions; while other countries approach cryptocurrencies with caution, and even take strict regulatory measures, such as limiting trading and prohibiting financial institutions from participating. For example, China clearly prohibits speculative trading activities involving virtual currencies, comprehensively regulating and cleaning up cryptocurrency-related businesses. If regulatory policies tighten further on a global scale in the future, restricting the development of cryptocurrency ETFs, the market share and trading activity of Dogecoin ETFs may be significantly affected, and investors may face risks of asset devaluation and trading restrictions.

6.2 Market Volatility Risk

The cryptocurrency market is known for its high volatility, and Dogecoin, as a member, experiences particularly intense price fluctuations. The price of Dogecoin is influenced by various factors such as market supply and demand, macroeconomic environment, investor sentiment, social media dynamics, and celebrity effects. In the past, the price of Dogecoin has experienced significant ups and downs due to tweets from celebrities like Musk on social media. When there is strong demand for Dogecoin in the market, the price may rise rapidly; however, once market sentiment shifts, investors may sell off in droves, causing prices to plummet sharply.

This high volatility will directly transmit to the Dogecoin ETF. When the price of Dogecoin drops significantly, the net asset value of the Dogecoin ETF will also decrease, causing the value of ETF shares held by investors to shrink, leading to investment losses. In addition, the high volatility of the market may also trigger panic among investors, leading to a large number of investors redeeming ETF shares. To meet redemption demands, the fund manager may need to sell Dogecoin assets, further exacerbating the decline in Dogecoin's price, creating a vicious cycle and exposing investors to greater risks. Figure 2 shows the significant price fluctuations of Dogecoin over a period of time, with price fluctuations exceeding 50% in some time periods, posing a significant challenge to the stability of the Dogecoin ETF.

6.3 Dogecoin self-risk

1. Technology Lag Risk: With the rapid development of the cryptocurrency market, new blockchain technologies and cryptocurrency projects continue to emerge. Compared to some emerging cryptocurrencies, Dogecoin's technological development is relatively lagging. Dogecoin is based on the Scrypt algorithm, which has certain limitations in terms of transaction speed, security, and scalability. Although its average transaction confirmation time is about 1 minute and has low fees, it has certain advantages in small-value payment scenarios. However, facing the growing market demand and more complex application scenarios, the existing technology may be difficult to meet. For example, some new blockchain projects have adopted more advanced consensus mechanisms, which can achieve higher transaction throughput and faster transaction confirmation speed, while Dogecoin's competitiveness in this regard is relatively weak. If Dogecoin fails to timely upgrade and innovate its technology, it may gradually lose market share, affecting its value and thereby having a negative impact on the investment value of Dogecoin ETF.
2. Competition Risk: The cryptocurrency market is highly competitive, and Dogecoin faces competition from multiple sources. In the meme coin field, new meme coin projects are constantly being launched, which may attract investors' attention and funds with more attractive concepts, stronger community operational capabilities, or more innovative technology. For example, some emerging meme coins have attracted a large number of young investors by combining with popular NFT (Non-Fungible Token) projects to create unique ecosystems. In the entire cryptocurrency market, mainstream cryptocurrencies such as Bitcoin and Ethereum dominate the market due to their mature technology, extensive application scenarios, and large user base. These mainstream cryptocurrencies have obvious advantages in value storage, smart contract applications, and other aspects, making Dogecoin face significant competition in attracting long-term and institutional investors. If Dogecoin is at a disadvantage in the competition, its market share and price may be impacted, thereby affecting the performance of Dogecoin ETF.
3. Community instability risk: The development of Dogecoin relies heavily on its community. The active participation and support of community members have driven the dissemination and application of Dogecoin. However, the Dogecoin community is somewhat unstable. The behaviors and opinions of community members are quite diverse, which may lead to internal conflicts due to disagreements on the development direction of Dogecoin. For example, on key issues such as technical upgrades and application expansion of Dogecoin, community members may have different opinions, resulting in a slow decision-making process that affects the project's progress. In addition, the community's activity may also be influenced by market trends and external factors. When the price of Dogecoin falls or market interest declines, the enthusiasm of community members may be dampened, weakening community cohesion, which is detrimental to the long-term development of Dogecoin and increases the investment risk of Dogecoin ETF.

Conclusion

Based on the risks and returns of Dogecoin ETF, investors should develop a reasonable investment strategy. For investors with a low risk preference, they should be cautious when participating in Dogecoin ETF investment, avoid investing too much capital to prevent significant losses. For investors with a higher risk preference, when investing, they should also avoid over-concentration and can use diversified investment, allocate Dogecoin ETF reasonably with other asset categories such as stocks, bonds, gold, etc., to reduce the impact of individual asset volatility on the investment portfolio. At the same time, investors should formulate long-term or short-term investment plans based on their investment goals and investment horizon, avoid frequent trading, and reduce trading costs.