Thomas Daniels
As the NYSE Arca submits its 19b-4 proposal, the Bitwise Dogecoin ETF moves forward.
An important step has been taken toward regulatory approval for Bitwise Asset Management’s Dogecoin-focused exchange-traded fund (ETF) after NYSE Arca submitted a 19b-4 petition to list and trade its shares. A rule change that would allow the exchange to offer the Bitwise Dogecoin ETF, giving investors direct exposure to the well-known memecoin, is sought in the March 3 application.
Organization and Function
Bitwise is the sponsor of the ETF, which is set up as a Delaware statutory trust. Tracking Dogecoin’s market value while paying for operating costs is its main goal. The net asset value (NAV) of the fund will be calculated using a CF Benchmarks Ltd. pricing benchmark. The Bitwise Dogecoin ETF will hold DOGE directly, with just small cash reserves kept for operating needs, in contrast to many cryptocurrency ETFs that depend on derivatives.
Dogecoin will be used to cover management fees and other fund-related costs. Any unexpected reception of additional digital assets, including those obtained through forks or airdrops, is expressly disclaimed in the trust agreement. Additionally, investors will not be able to directly contribute to or withdraw Dogecoin because the ETF will function on a cash generation and redemption basis.
Regulatory Actions and Institutional Partnerships
Bitwise has worked with important financial institutions for money administration and custody. The Bank of New York Mellon will be in charge of cash custody, administrative duties, and transfer agency services, while Coinbase has been appointed as the custodian for the fund’s Dogecoin assets.
After first registering the ETF in late January, Bitwise registered as an S-1 with the U.S. Securities and Exchange Commission (SEC) on January 28. A significant turning point in the current regulatory process was reached by NYSE Arca with its 19b-4 filing.
The Competitive Environment
Bitwise’s quest for a Dogecoin ETF is not unique. For comparable investment products, rivals Rex Shares, Osprey Funds, and Grayscale have also filed. On February 13, the SEC acknowledged Grayscale’s application, demonstrating that memecoin-related ETFs are being actively considered by the regulator.
Bitwise is investigating various cryptocurrency ETFs in addition to Dogecoin. On February 27, the company submitted an S-1 to the Delaware Department of State for an Aptos ETF. Bitwise could increase its footprint in the digital asset investment market by becoming the first U.S. provider of an ETF based on Aptos if it is approved.
