Dogecoin Spot ETF Gains Momentum: Bitwise Updates Filing with In-Kind Mechanism

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The path toward mainstream financial acceptance for Dogecoin (DOGE) has taken a significant leap forward. On May 26, Bitwise, a U.S.-based asset management firm, submitted an amended S-1 registration statement to the U.S. Securities and Exchange Commission (SEC) for a Dogecoin spot ETF. This update marks a pivotal development—not only suggesting that the SEC is engaging in substantive discussions but also indicating that approval could be drawing closer.

According to industry analysts, the revision signals more than just procedural progress—it reflects growing regulatory clarity and momentum behind crypto-based financial products.

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Regulatory Progress: A Sign of Forward Motion

Bloomberg Intelligence’s senior ETF analyst, Eric Balchunas, noted that Bitwise simultaneously updated filings for two cryptocurrency spot ETFs: one for Dogecoin and another for Aptos (APT). He shared on social platform X:

“This is a positive sign. It shows the SEC is actively reviewing and engaging with issuers—progress is being made, and it's aligned with the timeline of other pending crypto spot ETF applications.”

The fact that the SEC is allowing these revisions suggests the agency is no longer simply rejecting or ignoring applications outright. Instead, it's entering into what’s known as the “comment letter” phase—where regulators request clarifications, suggest changes, and work toward potential approval.

For Dogecoin, which began as a meme-driven digital currency, this marks a transformative moment. Being included in a regulated ETF structure brings it one step closer to institutional adoption and broader investor accessibility.

In-Kind Creation and Redemption: A Game-Changing Update

One of the most significant enhancements in Bitwise’s revised filing is the inclusion of in-kind creations and redemptions—a mechanism long standard in traditional ETFs but only recently adopted in crypto.

Under this model:

This contrasts sharply with the current cash-based system used by all existing U.S.-listed crypto ETFs, including Bitcoin and Ethereum spot ETFs. In those structures, APs must sell crypto to buy ETF shares (or vice versa), triggering taxable events and increasing operational costs.

With in-kind processing:

Balchunas emphasized:

“It’s almost certain now that future U.S. crypto spot ETFs will use in-kind mechanisms. This is a major upgrade for the entire ecosystem—it makes these funds structurally sounder and more attractive to institutional players.”

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Why the In-Kind Mechanism Matters

To understand its importance, consider how ETFs maintain price alignment with their underlying assets. When demand rises, APs create new shares by depositing the underlying asset (in this case, DOGE). When demand falls, they redeem shares and remove coins from the market.

Without in-kind capability:

But with direct token-for-share swaps:

This structural improvement doesn’t guarantee approval—but it shows issuers are addressing SEC concerns head-on, particularly around market manipulation and pricing integrity.

The Competitive Landscape: Who Else Is in the Race?

While Bitwise leads in transparency and filing updates, it’s not alone in pursuing a Dogecoin-linked product:

If approved, Bitwise’s ETF would likely become a frontrunner due to its proactive engagement with regulators and robust operational design.

Market Reaction: Cautious Despite Positive News

Despite the regulatory optimism, Dogecoin’s market performance remains muted. According to CoinGecko data, DOGE dipped approximately 2.3% over the past 24 hours, trading at around $0.1611 at the time of writing.

This disconnect between regulatory progress and price action isn’t uncommon. Investors often remain cautious until final approvals are granted—especially given the SEC’s historically skeptical stance on cryptocurrencies beyond Bitcoin.

Still, long-term observers view these developments as foundational. Each amendment brings the industry closer to normalization.

Frequently Asked Questions (FAQ)

Q: What is a spot ETF, and how does it differ from a futures-based ETF?
A: A spot ETF holds the actual underlying asset—in this case, Dogecoin—directly. A futures-based ETF invests in derivative contracts tied to DOGE prices. Spot ETFs offer more direct exposure and lower rollover costs.

Q: Why does the in-kind mechanism matter for investors?
A: It reduces tax consequences for APs, improves tracking accuracy, and lowers operational risk—benefits that ultimately enhance fund stability and reduce premiums/discounts.

Q: Has any Dogecoin ETF been approved yet?
A: No. All applications are still under review by the SEC. There is no guaranteed timeline for approval.

Q: Could this lead to more meme coin ETFs?
A: Possibly. Approval of a DOGE ETF could open doors for other large-cap meme or community-driven tokens—but regulatory hurdles would remain significant.

Q: How does this affect Dogecoin’s legitimacy as an asset?
A: Inclusion in a regulated ETF framework increases institutional credibility, improves liquidity infrastructure, and may attract conservative investors who avoid unregulated exchanges.

Q: Is a Dogecoin ETF safer than holding DOGE directly?
A: It offers custodial security and regulatory oversight but comes with management fees. Holding DOGE directly gives full control but requires secure self-custody practices.

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Final Outlook: Toward Institutional Acceptance

While challenges remain, Bitwise’s updated filing represents a clear evolution in how digital assets are being integrated into traditional finance. The move toward in-kind creation, combined with active SEC dialogue, suggests that a Dogecoin spot ETF isn’t just speculative—it’s becoming structurally viable.

For investors, this means greater access to crypto assets through familiar, regulated vehicles. For the broader market, it reinforces the trend of financial innovation converging with regulatory compliance.

As scrutiny continues, all eyes will remain on the SEC’s next steps. But one thing is clear: Dogecoin’s journey from internet joke to potential ETF staple reflects the rapid transformation of modern finance.

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