Bitwise Chief Funding Officer Matthew Hougan on Monday mentioned whereas meme coin ETFs aren’t completely off the desk, they don’t seem to be a “free-for-all,” highlighting the necessity for a liquid, globally distributed market with restricted insider affect.
What Occurred: Talking with Benzinga at The Digital Belongings Discussion board in London, Hougan mentioned the opportunity of these ETFs sooner or later, whereas additionally emphasizing that it wouldn’t be for all property and that they must be among the many high and most liquid.
Hougan cited Dogecoin DOGE/USD for instance of a meme coin that’s long-lasting, given its 12-year historical past, honest launch and energetic neighborhood.
“So is it an asset that the majority institutional or skilled traders ought to allocate to? No, undoubtedly not. It has no ‘elementary worth’ past its memetic,” whereas additionally noting “Is it an vital financial asset like Bitcoin BTC/USD? No.”
Nonetheless, he clarified, “Is it an ephemeral pump and dump scheme? No.”
Hougan emphasised that the core argument for providing a Dogecoin ETF is to supply a safe and cost-effective manner for the prevailing neighborhood to spend money on the token, somewhat than by way of probably dangerous centralized exchanges.
Nonetheless, when requested if the approval of a Dogecoin ETF would pave the way in which for different meme coin ETFs similar to Shiba Inu SHIB/USD, Bonk BONK/USD or Brett BRETT/USD, Hougan cautioned towards a binary perspective, stating that it is not “nothing or the whole lot.”
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Why It Issues: Hougan indicated that his firm wouldn’t be creating ETF’s for all crypto property, saying “We don’t need ETFs on property which can be illiquid, manipulated or important insider possession. Like these shouldn’t exist they usually don’t.”
He defined the necessity for a globally distributed, extremely liquid market with minimal insider affect, saying, “So what crypto property have a broadly distributed, extraordinarily liquid international market the place it’s arduous for insiders to control them?”
He famous that he has not accomplished the work on property like Bonk or different meme cash, which might point out a hesitance to create these ETFs.
He additionally expressed a perception that, whereas he expects ETFs for the biggest, high-quality crypto property among the many high 10-20, most meme cash will probably not qualify for an ETF, resulting from the truth that these smaller market cap cash could be too costly to run the ETFs on.
Hougan famous “by the point you get to asset like 25 is a tiny fraction of asset primary.”
He additional predicted important inflows into Bitcoin ETFs, anticipating north of $50 billion in 2025.
He defined his rationale by stating that the present traders will “double down” on their holdings, whereas there may also be new cash coming from institutional gamers.
He emphasised that whereas macro circumstances create short-term volatility, the long run drivers for Bitcoin are particular to crypto.
“Bitcoin goes to high $200,000 this yr,” resulting from the truth that new demand is larger than the brand new provide, from each ETF’s and company gamers. I see immediately as a shopping for alternative,” he mentioned.
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