While interest in meme coins remains high, regulatory uncertainty still poses a major hurdle. Several firms already filed for Dogecoin, TRUMP, and Bonk ETFs, but recent price declines and lowered prediction market odds means that sentiment is cooling. Meanwhile, major ETF issuers are pressuring the SEC to return to a first-to-file approval model. Across the Atlantic, the UK’s FCA recently proposed lifting its ban on crypto ETNs for retail investors.
Meme Coin ETF Momentum Builds
The possibility of the first actively managed meme coin-focused exchange-traded fund (ETF) launching in the United States is gaining traction, according to Bloomberg ETF analyst Eric Balchunas. In a June 7 post on X, Balchunas said there is a "really good chance" that such a fund could emerge, likely in 2026.
He expects a wave of active crypto ETFs to arrive first, which will pave the way for more niche products like a dedicated meme coin ETF. This type of fund will differ from traditional passive ETFs by dynamically adjusting its portfolio by holding outperforming tokens while selling off underperformers.
His comments were made in response to a post from the Vladcoin team, a Russia-themed meme coin project, which advocated for a performance-based ETF structure tailored to meme coins. The explosive growth in meme coin trading pushed the sector’s market capitalization above $60 billion this year, and could drive ETF issuers to capitalize on the trend.
One major hurdle remains regulatory. Balchunas pointed out that meme coins will likely need to be excluded from the scope of the 1933 Securities Act before being eligible for inclusion in such ETFs. The outcome of pending applications for a spot Dogecoin ETF, which was submitted by firms like Grayscale, Bitwise, and 21Shares, could serve as an important signal. Additionally, Osprey Funds and Rex Shares have also submitted applications to the SEC for Dogecoin, Official Trump (TRUMP), and Bonk (BONK) ETFs earlier this year.
However, market sentiment around meme coins has cooled since its peak in January. Most of the top meme coins experienced big price drops. In fact, Dogecoin is down 75%, Shiba Inu has lost 85%, Pepe fell almost 60%, and TRUMP is still 86% below its all-time high.
DOGE ETF approval odds (Source: Polymarket)
Prediction markets like Polymarket also lowered the odds of a Dogecoin ETF being approved this year from 75% to 44%, reflecting the ongoing regulatory uncertainty. While enthusiasm for meme coin ETFs is still high, the road ahead is still full of volatility and unanswered questions.
ETF Issuers Push SEC to Honor First-to-File Rule
A group of major ETF issuers, including VanEck, 21Shares, and Canary Capital, urged the US SEC to return to the “first-to-file” principle when approving ETF applications. In a joint letter, the firms criticized the SEC’s current practice of bundling decisions and prioritizing later applications. They argued that it undermines competition and deters innovation in the financial sector.
Historically, the first-to-file approach was the standard procedure for processing ETF applications, but the SEC shifted away from this model during the wave of crypto-related ETF filings.
The letter mentioned that delaying or disregarding early applications discourages pioneering companies from developing new investment products, which could lead to reduced investor choice and inefficiencies in the market. The issuers warned that this approach weakens the SEC’s own mandate to protect investors and foster capital formation. They also stressed that the global financial leadership of the United States is tightly linked to having regulatory frameworks that actively encourage entrepreneurship and innovation in financial products, especially in emerging sectors like digital assets.
The appeal to the SEC was made after a sharp increase in digital asset ETF filings, particularly after the election of President Donald Trump. This influx of applications includes altcoin ETFs and staking-related funds, which proves that there is growing institutional interest in broadening exposure to the crypto market.
Despite this momentum, the SEC repeatedly delayed its responses to several high-profile filings. In May, it extended its decision deadline on Grayscale’s spot Solana Trust ETF to October and likewise postponed verdicts on proposed staking and XRP-based ETFs.
Bloomberg ETF analyst James Seyffart pointed out that delays are typical under the 19b-4 filing process, with the SEC usually taking the full allotted time before issuing a decision. The Commission also raised concerns over the REX-Osprey staked ETFs, and questioned whether their business structure meets the requirements for ETF classification. These developments have stalled launches that many believed were imminent, and raised even more questions about how and when the SEC will greenlight the next wave of crypto investment products.
Crypto ETNs Could Soon Be Open to UK Investors
Meanwhile, the United Kingdom’s Financial Conduct Authority (FCA) proposed lifting its existing ban on cryptocurrency exchange-traded notes (ETNs) for retail investors. This will be a huge shift in the country’s approach to digital asset regulation.
Announced on June 6, the FCA's proposal will allow individual consumers to access crypto ETNs—so long as they are listed on a recognized investment exchange within the UK. The regulator stated that it plans to strike a better balance between investor protection and financial freedom. “We want to rebalance our approach to risk,” said David Geale, executive director of payments and digital assets at the FCA. “Lifting the ban would allow people to make the choice on whether such a high-risk investment is right for them, given they could lose all their money.”
FCA announcement
People in the industry welcomed the move as a positive development for the UK’s financial innovation goals. Diego Ballon Ossio, a partner at law firm Clifford Chance, explained that the proposal aligns with the UK’s ambition to be a leader in crypto finance. He added that allowing access to ETNs will not only offer new investment opportunities but also signal that the UK is embracing the digital asset economy.
Kraken’s UK General Manager, Bivu Das, also applauded the FCA’s shift by stating that it is a key milestone that reflects the maturation of the market. Ian Taylor of CryptoUK and HT Digital believes that the change could enhance consumer protections while still enabling exposure to crypto.
This move comes as the FCA is working on updating its crypto regulatory framework. In May, the regulator asked for public input on new stablecoin and custody rules. Meanwhile, Chancellor of the Exchequer Rachel Reeves announced intentions to establish a comprehensive regime that will position the UK as a global crypto hub. The urgency of these regulatory updates is heightened by reports showing the UK now leads globally in crypto adoption, outpacing even the United States.
Crypto ownership percentage (Source: Gemini)
At the same time, the growing use of cryptocurrencies in political donations triggered concerns among lawmakers. During a June 5 parliamentary debate, MP Sarah Olney questioned the transparency of crypto contributions after Reform UK leader Nigel Farage revealed his party had started accepting donations in Bitcoin and other cryptocurrencies.
