Memecoin ETFs Gain Traction Amid SEC Leadership Change

According to Cointelegraph, the first wave of memecoin-based exchange-traded funds (ETFs) is gaining momentum, partly due to new leadership at the US Securities and Exchange Commission (SEC). The crypto industry has witnessed an increase in memecoin ETF filings following the launch of the Trump family’s memecoins, which have garnered significant retail interest. The SEC received its initial filings for an Official Trump (TRUMP), Dogecoin (DOGE), and Bonk (BONK) ETF on January 21. The likelihood of approval for memecoin-based ETFs has increased under the new acting SEC Chair Mark Uyeda, who succeeded Gary Gensler. Dmitrij Radin, founder of Zekret and chief technology officer of Fideum crypto regulatory and infrastructure firm, expressed optimism about the potential approval of TRUMP, BONK, and DOGE ETFs, citing the new crypto-friendly SEC leadership. Radin noted that this move could potentially enhance liquidity and mainstream acceptance of memecoins. However, he also cautioned about the inherent volatility of these tokens, emphasizing that they often rely on cultural momentum and speculative interest, lacking underlying value and leading to high volatility. The memecoin ETF filings follow the launch of the TRUMP token on January 18 and the Official Melania (MELANIA) token on January 19. These tokens reportedly attracted over 200,000 new users onchain, as reported by Moonshot, the platform promoted by US President Donald Trump for purchasing his memecoin. Despite the influx of new users, the TRUMP token has struggled to maintain momentum, experiencing a decline of over 14% in the past 24 hours, trading at $35.81, which is approximately 52% below its all-time high of over $75 recorded on January 19, according to CoinMarketCap data. While a potential ETF could attract more institutional investment and stabilize the price volatility of the underlying memecoin, it still poses significant risks for investors. Radin highlighted that memecoin price action is heavily influenced by trends and retail speculation. He compared investing in such products to betting on a small-cap stock before it gains traction, drawing parallels to the GameStop saga, where the hype eventually led to a severe drop. Radin described the memecoin ETF filings as an "intriguing experiment for crypto," but warned that the price performance of these coins is contingent on cultural participation. Meme-based investing gained increased retail popularity with the first GameStop short squeeze in 2021, which saw GameStop stock prices soar by over 1,000% in a month.