Memecoin ETF on the Horizon: Bloomberg Analyst Predicts Active Fund by 2026

A memecoin-focused exchange-traded fund (ETF) may be closer than many think, according to Bloomberg ETF analyst Eric Balchunas, who believes an actively managed memecoin ETF could debut as early as 2026.

In a post shared on X (formerly Twitter) on June 7, Balchunas commented that there’s a “really good chance” we’ll see an ETF that trades exclusively in memecoins. His prediction follows increasing institutional interest in crypto-themed ETFs and a surge in retail memecoin trading activity in 2024.

“First, we’ll get a slew of active crypto ETFs,” Balchunas said, referencing the broader wave of actively managed digital asset products. “Then you’ll see one focused purely on memecoins.”

Why a Memecoin ETF Makes Sense Now

The memecoin sector has exploded, with its market cap recently exceeding $60 billion largely driven by retail traders seeking high-risk, high-reward plays. This has caught the attention of ETF issuers who are always on the lookout for marketable products with strong consumer interest.

The concept of a memecoin ETF was sparked by a post from the Russia-inspired memecoin project Vladcoin, which argued for an actively managed fund that would rotate holdings based on memecoin performance buying strong performers and selling weaker ones. This structure differs from traditional passive ETFs, which track a fixed index or single asset.

Balchunas confirmed that once memecoins are no longer categorized under the 1933 Securities Act, an actively managed fund could hold them legally. He also highlighted that upcoming Dogecoin ETF applications will serve as a bellwether for the future of memecoin-based ETFs.

Dogecoin ETFs: The Litmus Test

Several asset managers, including Grayscale, Bitwise, and 21Shares, have filed applications for spot Dogecoin ETFs. In addition, Osprey Funds and Rex Shares submitted SEC filings in January for memecoin ETFs tracking Dogecoin (DOGE), Official Trump (TRUMP), and Bonk (BONK).

Balchunas previously estimated a 75% chance of a spot Dogecoin ETF gaining SEC approval in 2024. However, the prediction markets tell a more cautious story. On Polymarket, odds have dropped to 44%, suggesting declining confidence amid continued regulatory uncertainty.

The SEC has not yet approved any memecoin-based ETFs or ETFs for other major altcoins like Solana (SOL), XRP, or Litecoin (LTC) despite a wave of applications submitted in 2024.

Reality Check: Memecoin Market in Retreat

While long-term sentiment is cautiously optimistic, memecoins are currently in retreat. The sector, which peaked in January, has since experienced sharp corrections across the board:

• TRUMP is down 86% from its ATH
• Dogecoin (DOGE) has fallen 75%
• Shiba Inu (SHIB) has dropped 85%
• Pepe (PEPE) is off nearly 60%

Even Eric Trump’s recent endorsement of the TRUMP token failed to reverse the downtrend. His remarks, made during a June 6 announcement about World Liberty Financial acquiring TRUMP, couldn’t sustain the token’s momentum.

Despite the current bearish price action, the potential for ETF integration could provide a new growth engine for memecoins transforming them from niche internet phenomena into institutional-grade assets.