Canary Capital Seeks PEPE ETF Launch Despite Token’s 85% Price Drop

Canary Capital filed Wednesday. The investment firm wants SEC approval for a spot PEPE ETF that would track Pepe Coin, even though the meme token crashed 85% from its December 2024 peak and keeps swinging wildly in daily trading sessions.

The application comes at a pretty rough time for PEPE holders, but Canary sees opportunity where others see risk. The firm thinks a regulated ETF could bring stability and transparency to what’s been a chaotic meme coin market. Laura Jenkins, Canary’s spokesperson, said Thursday the company wants to “pioneer innovative financial products that align with evolving investor interests.” She didn’t specify how many investors have shown interest yet.

Market analysts aren’t convinced. Too risky for most.

Derek Thompson from FinTech Advisory thinks differently though. He said Friday a successful PEPE ETF “could pave the way for other meme-based tokens to enter the ETF space” and that investors want new ways to engage with digital assets. But Thompson also warned about the volatility – PEPE swung 12% in a single day on April 8, which shows how unpredictable these tokens can be.

SEC Review Process Begins

The SEC hasn’t commented publicly on Canary’s application. The commission typically takes several months to review crypto ETF proposals, often asking for additional information or changes. Previous meme coin ETF attempts faced scrutiny over market manipulation concerns and security issues.

Canary Capital enlisted legal experts to handle compliance requirements. The firm secured partnerships with several custodians on April 7 to manage the underlying PEPE assets safely. CEO Mark Ellison said during a press briefing that the ETF would offer a “regulated and transparent avenue for investors.”

No timeline exists yet. The application sits in preliminary review.

The company prepared contingency plans for potential delays or additional SEC scrutiny. Canary plans to work with regulatory consultants if the commission raises concerns about investor protection standards. But there’s no guarantee approval will come at all – crypto ETF rejections happen frequently.

PEPE Community Stays Hopeful

Pepe Coin’s community remains active despite the price crash. Many holders hope an ETF could renew mainstream interest in the token. The meme coin still captivates a niche market segment, even trading 85% below its all-time high. Market participants tracking Bitcoin Stays Strong Above K Despite will find additional context here.

Canary’s move coincides with broader interest in structured meme coin products. Other firms expressed interest in launching similar crypto ETFs, creating fierce competition. The regulatory path stays uncertain for all applicants.

Industry insiders watch closely for precedent. A successful PEPE ETF approval could open doors for other meme tokens to enter traditional finance markets. But the SEC’s cautious approach to crypto products means nothing’s guaranteed.

Canary Capital declined to comment on specific timelines or investor interest levels. The firm stays optimistic about approval chances despite the challenging regulatory environment. Ellison and his team continue preparing for various scenarios while waiting for the SEC’s decision.

The proposed ETF would list on a major U.S. exchange if approved. Canary aims to provide easier access for investors wanting digital asset exposure without directly buying volatile tokens. The structured approach could appeal to institutional investors who avoid direct crypto purchases.

PEPE’s price volatility continues creating uncertainty. Daily swings of 10% or more remain common, reflecting ongoing speculative trading activity. Canary argues this volatility makes a regulated ETF even more valuable for risk management.

The SEC’s review will examine market stability and investor protection measures. Previous crypto ETF applications faced months of back-and-forth before final decisions. Some got approved after extensive modifications, while others faced outright rejection. Market participants tracking Bitcoin ETF Inflows Hit 1 Million will find additional context here.

Canary Capital’s application represents a test case for meme coin legitimacy in traditional finance. Success could validate the entire meme token sector, while failure might discourage similar attempts. The stakes feel pretty high for both the company and the broader crypto industry.

The meme coin ETF space has seen mixed results historically. VanEck withdrew its proposed Dogecoin ETF application in September 2023 after facing regulatory pushback, while Grayscale’s Bitcoin Trust conversion took nearly a decade to achieve approval. Canary’s PEPE application joins at least four other pending meme token ETF filings currently under SEC review, including proposals for Shiba Inu and Floki-based products from competing asset managers.

PEPE’s underlying fundamentals present unique challenges compared to established cryptocurrencies. The token lacks a development team or roadmap, operating purely as a community-driven meme project with no utility beyond speculative trading. Daily trading volume averages $2.8 billion across major exchanges, but liquidity remains concentrated among retail investors rather than institutional participants. Canary must demonstrate sufficient market depth and manipulation resistance to satisfy SEC requirements – criteria that proved difficult for previous meme coin applications.