Memecoin ETFs Could Be on the Horizon as Market Interest Grows: Analyst

The emergence of a memecoin-focused exchange-traded fund (ETF) in the U.S. is gaining momentum, with Bloomberg ETF analyst Eric Balchunas indicating a "really good chance" of such a fund launching in the near future.

Balchunas shared on X that active crypto ETFs are likely to precede a dedicated, actively managed memecoin ETF, potentially debuting around 2026.

This optimistic outlook coincides with a surge in memecoin popularity, particularly among retail investors. The aggregate market capitalization of these tokens has exceeded $60 billion, fueled by rapid trading and widespread community enthusiasm.

Balchunas was responding to a proposal from the Vladcoin team, who suggested a dynamic ETF model. This model would actively manage memecoin holdings, buying and selling based on market performance—selecting top performers and divesting from underperformers, a departure from traditional ETFs that passively track a single asset.

Regulatory Considerations and Increasing Demand

The realization of a memecoin ETF hinges on regulatory clarity. Balchunas noted that the reclassification of tokens, moving them outside the purview of the 1933 Securities Act, could pave the way for their inclusion in active ETFs. He also emphasized the significance of the pending Dogecoin ETF application, viewing it as a potential indicator for the broader memecoin ETF landscape.

Several prominent firms—including Grayscale, Bitwise, and 21Shares—have filed applications for a spot Dogecoin ETF. Furthermore, Osprey Funds and Rex Shares have pursued approval for ETFs centered on other trending memecoins such as TRUMP and BONK.

To date, the SEC has not approved any altcoin-based ETF, including applications for Solana, XRP, and Litecoin.

Prediction market platform Polymarket currently assesses the probability of a Dogecoin ETF approval at 44%, a decrease from 75% earlier in the year, reflecting a more cautious sentiment among traders.

Memecoin Market Performance

While the long-term prospects for memecoin ETFs are being considered, the short-term market performance presents a contrasting picture. Following a peak in January, many leading memecoins have experienced significant price corrections.

Dogecoin has declined by 75%, Shiba Inu has decreased by 85%, and TRUMP is down 86% from its all-time high.

Despite the recent downturn, ongoing community engagement and the potential for ETF exposure suggest that the sector could establish a more formalized presence within the investment ecosystem.