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Dogecoin Expected to Lead Growth in Crypto-Focused ETFs

The acceleration of the crypto-focused ETFs growth is expected to continue this year, with the meme coin, DOGE, predicted to lead the charge. This prediction was made by the crypto trading firm, Wintermute, in a report released Friday.

Last year, traditional financial institutions showed a significant interest in trading meme coins. Tokens like Dogwifhat (WIF), BONK (BONK), and PONKE (PONKE) based on Solana were the driving force behind Wintermute’s OTC market share growth, which rose from 0.3% in 2023 to 5.1% in 2024.

However, no asset manager has yet applied for a Dogecoin ETF in the U.S. Jake Ostrovskis, an OTC trader at Wintermute, upheld the firm’s prediction but also acknowledged that it was intended to be somewhat tongue-in-cheek. He stated, “Volume ultimately drives interest, which ultimately drives indexation. If the meme coin sector does continue, you can imagine where it goes, and the most liquid name within that [group] is DOGE.”

Dogecoin was originally created in 2013 as a joke, with its explicit lack of utility serving as a parody of the industry. However, it gained popularity after tech CEO Elon Musk endorsed it. Meme coins have become one of the hottest trends in crypto, despite their volatility and trading based on little more than vibes.

OTC spot volumes for meme coins among traditional financial institutions increased by 210% from 2023 to 2024, according to the report. Overall, meme coins’ popularity grew, representing 16% of Wintermute’s OTC volumes in 2024 compared to 7% in 2023.

OTC trading desks are typically utilized by financial institutions looking to execute large transactions. In the context of crypto, they can often offer traders better prices by operating across multiple exchanges rather than a single platform.

A portion of Wintermute’s counterparties come from a traditional finance background, according to Ostrovskis. The fragmentation of the crypto market can pose challenges, with its myriad tokens and chains. In 2024, Dogecoin and Shiba Inu accounted for 53.6% and 34.6% of Wintermute’s OTC volumes, but other coins, including Dogwifhat and Pepecoin (PEPE), also saw an increase in popularity.

However, Ostrovskis noted that shifting narratives within crypto could impact OTC volumes. Wintermute’s counterparties showed a particular interest in trading meme coins last March and an “AI angle” toward the end of the year. He concluded, “It gets a lot of attention when it’s hot. But at the moment, it has cooled down a lot.”

Edited by Sebastian Sinclair.

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