Overview of the REX-Osprey DOGE ETF
On September 18, the inaugural Dogecoin (CRYPTO: DOGE) exchange-traded fund (ETF), named the REX-Osprey DOGE ETF, (NYSEMKT: DOJE), commenced trading. Its main objective is to reflect the price of Dogecoin before subtracting fees and expenses, with a manageable 1.5% expense ratio, while storing crypto with a U.S. bank custodian.
Recent Performance of Dogecoin
As of October 27, Dogecoin’s value has dropped 11% over the last month, primarily due to the crypto flash crash on October 10, which was not specifically linked to Dogecoin.
What the ETF Offers
The Dogecoin ETF aims to accurately reflect the asset’s value, excluding fees. This means that when Dogecoin experiences price changes, the ETF will mirror those movements, granting access through traditional financial accounts. It’s important to consider the ETF’s risk profile as equivalent to that of Dogecoin itself.
Convenience vs. Costs
With various Dogecoin ETFs potentially hitting the market soon, these products are designed to offer similar exposure through brokerage accounts. While an ETF offers a convenient way to hold cryptocurrencies within a retirement or brokerage account, directly owning Dogecoin eliminates ongoing fees, making it a preferable choice if you manage your wallet effectively.
Investment Considerations
The discussion around Dogecoin centers on whether the asset itself is worthy of investment. Currently, the underlying value of Dogecoin lacks substantial mechanisms for future growth beyond hype. Although the ETF could attract new investments that may raise Dogecoin’s price, its fundamental use cases and reliance on community interest present significant challenges.
Future Potential of Dogecoin
Even though some advancements in features for Dogecoin may enhance its utility, such as supporting Layer-2 blockchains and smart contracts, these proposals remain unimplemented and uncertain. Hence, purchasing an ETF that mirrors Dogecoin is unlikely to yield improved returns without a credible future for Dogecoin itself.
Investment Advice
Before considering an investment in the ETF Opportunities Trust – REX-Osprey Doge ETF, it’s worth examining alternative options. The Motley Fool Stock Advisor team has identified 10 best stocks that could yield significant returns, and the REX-Osprey DOGE ETF is not among them.
