jakiro
author:Thejaswini, source: Token Dispatch
Exchange-traded funds (ETFs) were born in crisis.
On Black Monday in 1987, the Dow Jones Index plummeted more than 20% in one day.Regulators and market participants realize they need better tools.Mutual funds can only trade at the end of the trading day, which leaves investors powerless when the market panics.
ETFs came into being and became a solution.ETFs are securities baskets that trade like individual stocks that provide instant liquidity when the market situation deteriorates.
ETFs simplify index investments and provide extensive market exposure with low fees and tax efficiency.They are designed to be transparent without proactive management – tracking only indexes without trying to go beyond them.The first successful ETF, launched in 1993, was called the SPDR S&P 500 Index (SPY), and became the world’s largest fund by tracking the S&P 500 strictly as promised.
At the beginning, this idea was really good.You want to buy “stocks”, but you don’t want to study individual companies, and you don’t want to spend money to ask a fund manager to help you do this.
In September 2025, Wall Street crossed a new threshold: packing meme coins into regulated investment products and charging an annual fee of 1.5%.
Are we witnessing the essential transformation of ETFs?
ETFs have evolved from simple tools to simplify investments to complex tools that integrate any strategy you can think of.There are unlimited ways to combine, hedge, periodic or construct investments, but there are only a limited number of companies that can actually be invested in.
There are now more than 4300 exchange-traded funds, while there are only about 4200 publicly traded companies.ETFs account for about 25% of all investment vehicles, compared with 9% a decade ago.For the first time in market history, the number of funds exceeded the actual number of stocks.
In my opinion, this creates a fundamental problem – too many choices and investors are unable to cope with it rather than empower it.Today, we have funds covering all imaginable topics, trends or political views.The line between serious long-term investment and entertainment has been completely blurred.It is almost impossible to distinguish between products designed to accumulate wealth and products designed to capitalize on social media trends.
Stop.This anxiety is completely out of focus.Dogecoin ETFs do not distort the mission of cryptocurrencies.
For fifteen years, cryptocurrencies have been regarded as worthless online currencies.The traditional financial community calls us the degenerate speculators who play with valueless tokens.They say we will never create anything real, never get institutional adoption, never deserve serious regulatory treatment.
Now, they try to get value from the assets we create as jokes.
The cryptocurrency industry has created a new category of value that traditional finance cannot be ignored, eliminated, and ultimately irresistible to monetization.Dogecoin’s acquisition of ETFs before half of Fortune 500 companies develop a comprehensive crypto strategy is the cruelest testament to the dominance of cryptocurrency culture.
Well, now that we have celebrated the victory, let’s see what exactly we are celebrating.
Why would anyone pay 1.5% for what’s available for free?
Memecoin ETFs have no meaning to investors’ economic logic, but they are completely reasonable for Wall Street.
You can buy Dogecoin directly on Coinbase, complete it within five minutes, and zero follow-up fees.The REX-Osprey Dogecoin ETF charges a 1.5% annual fee to get the same exposure – for a $10,000 investment, it’s $150 a year.The fee for Bitcoin ETF is 0.25%.So why would anyone pay six times more for meme coins than digital gold?
The answer reveals the true target users of these products.Bitcoin ETFs serve institutional investors and savvy wealth managers who need regulatory compliance, who understand cryptocurrencies.They compete on fees because their customers have alternative options and know how to use these alternative options.
The target of the memecoin ETF is for retail investors who see Dogecoin trends on TikTok but don’t know how to buy directly.They pay for simplicity and legality, not market exposure.These investors won’t shop around – they just want to click “Buy” on the Robinhood app to get the meme exposure they keep hearing.
The issuer knows that it’s ridiculous.They know customers can buy Dogecoin cheaper elsewhere.They bet most people won’t find this or don’t want to deal with crypto exchanges and wallets.The 1.5% fee is essentially a tax on financial ignorance, packaged as institutional legality.
What makes an asset worthy of being included in an ETF?
Traditional ETF definition: a regulated investment fund holding a basket of diverse securities that trade on exchanges like stocks, providing investors with extensive market exposure while maintaining professional regulation, custody standards and transparent reporting.
Classic models track indexes such as the S&P 500, and hold hundreds of companies in multiple industries.Even single-industry ETFs, such as technology or healthcare funds, hold dozens of stocks in their areas of focus.Diversification reduces risks while providing exposure to market trends.
Now let’s see what Dogecoin is: a cryptocurrency created in 2013 by copying the Litecoin code and adding the meme dog logo, born purely as irony.It has no development team, no business plan, no revenue model, no technological innovation.Its supply increases by 5 billion coins per year, which is designed to be inflationary, mocking the scarcity of Bitcoin.
This token has no economic purpose.You can’t build applications on it, nor can you get profits from staking.Its only function is to exist as an online meme, occasionally hyped for celebrity tweets.
What kind of regulatory loopholes make this possible?
The path of marketization reveals the actual operation of financial innovation: regulatory arbitrage that circumvents the spirit of the law but technically complies with legal provisions.
The REX-Osprey Dogecoin ETF (DOJE) was introduced under the Investment Companies Act of 1940, not under the Securities Act of 1933, which regulates commodity ETFs such as Bitcoin funds.This choice is crucial.The 1940 Act provides that unless the Securities and Exchange Commission (SEC) objection is raised, it will be automatically approved 75 days later, creating a regulatory shortcut.what is the problem?The 1940 Act was intended to support diversified mutual funds that diversify risks and spread risks to multiple assets, rather than single-asset speculation on abandoned memes.
To meet the diversity requirements, DOJE cannot directly hold Dogecoin.Instead, it gains exposure through its Cayman Islands subsidiary’s use of derivatives, capping its holdings at 25% of the assets.This leads to a ridiculous situation: Dogecoin ETFs can only have a maximum of 25% Dogecoin exposure.
This fundamentally changes what investors actually buy.When an ETF holds an asset directly, it accurately tracks the asset price.The use of derivatives through offshore subsidiaries introduces tracking error, counterparty risk and complexity, thus distorting performance.The returns of funds are out of touch with the actual market trend of Dogecoin.
This kind of regulatory detour creates transparency issues.Retail investors who buy Dogecoin ETFs expect to get direct access to meme exposure they see on social media.But what they actually got was a complex derivative product, with three-quarters of the investment not related to changes in Dogecoin’s price.Their returns are diluted by the remaining 75% of other assets in the fund.
Worse, this structure subverted the original protection intentions of the Securities Act of 1940.Congress has diversified rules aimed at reducing risk by spreading investments across multiple assets.Wall Street has found a way to use the same rules to package high-risk speculation into regulated tools, but the regulation is weaker than expected.Instead of protecting investors from risks, the regulatory framework has masked new risks with institutional legitimacy.
Compared to Bitcoin ETFs, most Bitcoin ETFs, such as ProShares BITO or Grayscale’s spot Bitcoin ETF attempts, usually use the Securities Act of 1933 or other frameworks designed for commodity funds, allowing for more direct or futures-based Bitcoin exposure without being subject to a strict 25% asset cap limit.
Bitcoin ETFs usually hold futures contracts directly or seek to directly custody Bitcoin (when approved), thus closer to tracking the underlying price of Bitcoin.
Dogecoin ETF represents the perfect storm of regulatory arbitrage.The ETF’s investment target is basically inconsistent with the goal it should track, holding a useless asset, but taking advantage of laws in the 1940s aimed at preventing such speculation.This is the most cynical manifestation of financial engineering – taking advantage of regulatory loopholes and creating speculative products under the guise of investor protection.
Why are you so obsessed with profits?
Wall Street has given up its focus on fundamentals and strives to pursue profits regardless of asset quality.
State Street data shows that the stock allocation of institutional portfolios has reached its highest level since 2008.Investors are investing their funds in option earnings ETFs that promise monthly dividends, high-yield junk bonds, and crypto-related earnings products that provide double-digit returns through derivatives.
Capital flows prioritize chasing returns, and then ask questions later.As interest rates soar, investors actively turn to high-yield corporate bonds and abandon safer investment-grade bonds.Theme ETFs focused on artificial intelligence, cryptocurrencies and meme assets are launched at record rates, catering to speculative demand rather than long-term value.
The risk preference indicator continues to show green light.Despite uncertainty in the macro market, the volatility index (VIX) remains low.After the turmoil in early 2025, the defensive sector briefly attracted inflows, but funds quickly returned to high-risk, high-return sectors such as industry, technology and energy.
Wall Street has basically decided that in a world of infinite liquidity and continuous innovation, profits outweigh everything.If something can bring a premium return, investors will always find reasons to buy, regardless of fundamentals or sustainability.
Are we making bubbles?
What happens when the number of investment products exceeds the actual investment target?
We have crossed the “Rubicon River” and the number of ETFs exceeds that of stocks.This is a fundamental change in the market structure.We are actually creating a synthetic market on top of the real market, and each additional layer adds costs, complexity, and potential failure points.
Matt Levine points out:
“As ETFs become more popular and technology makes their implementation cost less, more once customized and handmade transactions will become standardized ETFs.The potential number of transactions far exceeds the number of stocks…In the long run, the potential market space of ETFs is limited by the (unlimited) transactions, rather than the (decreasing) stocks.”
The memecoin ETF phenomenon accelerates this trend.Rex-Osprey has submitted traditional ETF applications for Trump Coin ETF, Bonk ETF, and XRP and Solana.There are currently 92 crypto ETF applications waiting for approval at the SEC.Each successful launch creates demand for the next product, regardless of its underlying utility.
This is reminiscent of the CDO squared problem in 2008, when Wall Street created derivatives of derivatives until financial products are completely out of touch with the underlying reality.We now do the same with attention and cultural phenomena instead of mortgage loans.
The market looks more liquid than it actually is because multiple products trade around the same underlying asset.But in a crisis, all of these products tend to fluctuate together,Fluidity will evaporate at the same time.
What does a meme coin ETF mean?
The deeper story is about finance’s evolution into a comprehensive attention-catching mechanism that monetizes any phenomenon that generates price fluctuations.
The launch of ETFs has created its own development momentum through the network effect.Dogecoin’s price rose 15% in the month before DOJE’s listing, driven by expected inflows by institutional investors.Higher prices attract more attention, which in turn leads to more memes, thereby enhancing cultural relevance, which provides reasons for the birth of more financial products.Success will lead to imitation.
Traditional finance monetizes productive assets such as factories, technology and cash flow.Modern finance monetizes any factors that can drive prices: narratives, memes, social momentum.ETF packaging translates cultural speculation into institutional products, extracting fees from the communities that initially created these phenomena.
The broader question is, is this innovation or exploitation?Is financializing memes creating new value, or is it just to extract value from the organic cultural movement by increasing institutional costs?
Online culture has generated huge economic value—advertising revenue, commodity sales, platform participation and creator economy.
I think it’s time to “soft start” my relationship with online culture.
I’ve been thinking about what drives these businesses to billions of dollars in 2025.Somehow, I actually ordered matcha at Mitico coffee roastery in Bangalore just to feel like I was involved.Not because I particularly like the taste of grated green powder, but because matcha has become a sense of ritual, symbolizing productivity and tranquility luxury, which somehow makes you feel more connected to the global health aesthetic.
Internet culture has now become a scene where a series of participation expenses disguised as lifestyle choices.And monetization opportunities are everywhere, from straightforward absurdity to truly clever design.
Check out the hot events in 2025.We witnessed Coldplay’s “Kiss Cam” incident, turning the two people’s embarrassing moments into a corporate resignation scandal, and even Gwyneth Paltrow inexplicably became the interim spokesperson.The entire network is crazy about whether 100 men can beat a gorilla (spoiler: experts say yes, but reluctant).The Labubu craze turns the $30 blind box collection into a symbol of identity, and people even rush to buy it in stores.
Then there is the language barrier that I can’t overcome.Generation Z slang continues to evolve.Last week someone said I was wearing a “bussin’” and I really don’t know if I should be angry or happy.Obviously this is OK?My nephew tried to explain that “rizz” was a description of something attractive, but then he started talking about “skibidi” this, “Ohio” that, and I realized that I could not keep up at all.I tried to keep up, but to be honest, trying to use these words correctly made me feel a little “cheugy” (clavious).This “over-strength millennial” atmosphere is not what I want.
Taylor Swift then got engaged to Travis Kelce and within minutes the entire marketing universe turned.From Walmart to LEGO to Starbucks, brands put everything down and rush to insert into this conversation.
The key is that this cultural momentum itself is an economic engine.Katy Perry made an 11-minute space flight and spent a week on the internet debating whether it was “luxury and wasteful” — an engagement that could be translated into advertising revenue, brand exposure and cultural capital that could be monetized in more than a dozen different ways.When everyone starts calling friends “pookies” because of a couple on TikTok, suddenly an ecosystem of pookie playlists, pookie ribbons and pookie peripherals forms.
Online culture creates huge economic value through creator economy, commodity sales, platform participation, and a movement to drive stock price fluctuations faster than quarterly financial reports.If an Elon tweet could add billions of dollars in market capitalization to Dogecoin, and if Tesla’s valuation relies more on cultural momentum than fundamentals, then cultural phenomena are legitimate economic forces that deserve the same institutional packaging as other asset classes.
ETF packaging does not extract value from these communities—it formalizes existing value so that it can reach it to people who were previously excluded.Ohio retirees can now get exposure to online culture through their 401(k) program without learning to encrypt your wallet or browsing Discord servers.
In turn, the same retiree may also lose a lot of retirement savings due to an abandoned online joke.A single 1.5% annual fee will eat $1,500 from a $100,000 investment each year, whether Dogecoin is up or down.Due to regulatory requirements, the ETF can only have 25% Dogecoin exposure, and the retiree may not have the cultural exposure they thought they bought.Financial accessibility without financial education can be dangerous.Making speculative assets easier to buy doesn’t reduce risk—just make it less obvious to those who may not understand what they buy.
Financializing memes may actually strengthen these communities rather than exploiting them.When cultural movements are supported by institutional investment, they gain stability and resources.
If online culture can drive prices, online culture becomes an asset category.If social momentum creates volatility, social momentum becomes tradable.ETF packaging is just a mechanism for the transmission of cultural energy into institutional products.
