Canary Capital Moves Further into Niche Cryptocurrency Area with New Demand for Memecoin-Linked Spot ETF Pepe (CRYPTO: PEPE) (CRYPTO: PEPE), indicating that the race to integrate increasingly speculative digital assets into the ETF envelope is intensifying.
The asset manager has submitted a Form S-1 to the US Securities and Exchange Commission (SEC) for the CANARY PEPE ETF, which would directly track the price of the token by holding PEPE on deposit. The filing also noted that up to 5% of the fund’s assets could be allocated to Ethereum (ETH) in order to cover transaction fees on the Ethereum network.
The move was made despite PEPE’s volatile history and concentrated ownership structure. The token – based on the Pepe the Frog meme – has gained prominence in 2024, but remains about 85% below its all-time high.
Canary has already filed for ETFs tracking tokens like XRP (CRYPTO: XRP) (CRYPTO: XRP), Solana (CRYPTO: SOL) (CRYPTO: SOL), Ivy (CRYPTO: HBAR) (CRYPTO: HBAR) et Be (CRYPTO: SEI) (CRYPTO: SEI), the company is venturing further and further up the risk curve, including with a previous filing for a Mog Coin ETF.
Key Features and Takeaways:
- Spot exposure: The ETF is designed to hold PEPE directly, providing investors with pure price exposure rather than derivatives-based tracking.
- Fee mechanism: An allocation of up to 5% to ETH will be used to pay Ethereum network transaction fees.
- Concentration risk: The top 10 wallets control approximately 41% of the circulating supply of PEPE, raising concerns about concentrated ownership.
- Weak price momentum: PEPE is still about 85% below its December 2024 peak, according to CoinMarketCaphighlighting the risks of volatility.
- Altcoin ETF Trend: The filing reflects a broader industry push toward more speculative crypto ETFs, with issuers testing investor appetites beyond Bitcoin and Ethereum.
The filing also comes amid an evolving regulatory landscape in the United States, with uncertainty surrounding cryptocurrency legislation — including the CLARITY bill — still shaping how quickly these products can come to market. Canary himself acknowledged that changing rules around PEPE and the Ethereum network could have a significant impact on demand and usage, adding another layer of risk to an already highly volatile asset class.
Photo courtesy of: Akif CUBUK on Shutterstock.com
