Pepe Tries to Suit Up for Wall Street: Files for ETF, Market Responds With a Collective Yawn

Canary Capital put Pepe in the spotlight on Wednesday with an ETF application tracking the meme coin's price, but the token's muted reaction suggests Wall Street's enthusiasm for vibe-based assets remains lukewarm. On Thursday, Pepe traded around $0.00000359, up roughly 0.6% over the prior day, per CoinGecko. The day before, trading volume climbed 10% to $432 million.

Meme coins once drove growth for market makers like Wintermute. But the firm admitted last year that its prediction of a major asset manager launching a meme coin ETF—specifically Dogecoin—was meant as a joke. Today, four crypto asset managers offer U.S.-listed Dogecoin ETFs. Still, constructing a credible investment case for Doge remains challenging.

"It's very hard for institutional investors to construct a credible investment rationale around something like Doge, which is perhaps more geared towards the retail audience," CoinShares head of research James Butterfill told Decrypt. Dogecoin ranks 17th among all crypto ETFs tracked by CoinShares, with just $13 million in year-to-date inflows. Beyond Bitcoin, Ethereum, Solana, and XRP, altcoin ETFs account for just 9% of total AUM. "They're just not popular with investors," Butterfill noted. "It's the big four and not much else."

SEC Chair Paul Atkins indicated last November that most cryptocurrencies, including meme coins, shouldn't be treated as securities. SEC guidance published last month categorized meme coins as "digital collectibles." Under generic listing standards for crypto ETFs established last year, exchanges can list commodity-based ETFs without case-by-case approval, provided underlying assets have six months of regulated futures trading history.

Pepe futures currently trade on Kraken. Canary's filing noted that these contracts "are typically traded on regulated or registered trading venues." Canary has also filed for ETFs tracking other meme coins: Mog, Pudgy Penguins' PENGU, and President Donald Trump's TRUMP.

Bloomberg Senior ETF Analyst Eric Balchunas has expressed skepticism about the TRUMP ETF passing SEC muster, citing insufficient futures trading. He previously noted the ETF industry is famous for "throwing spaghetti at the wall." Butterfill described the recent flurry of filings as a "machine gun approach."

Tuttle Capital Management has gone further, filing in January for leveraged TRUMP, BONK, and MELANIA ETFs. The SEC hasn't issued final rulings on those applications yet.