Grayscale Bets on Dogecoin: Will Institutional Demand Push DOGE Price Higher?

Grayscale Investments announced the launch of its Grayscale Dogecoin Trust on Friday, allowing institutional and accredited investors exposure to the meme-inspired cryptocurrency.

Dogecoin's market capitalization has reached $50 billion, with its price tripling over the past year, according to CoinGecko.

The token's surge aligns with crypto-friendly policies under the Trump administration, including the creation of the Department of Government Efficiency (D.O.G.E.).

The new trust charges a 2.5% annual management fee and follows Grayscale's strategy with its XRP Trust, launched in September 2024. The firm has also filed for an XRP ETF with the New York Stock Exchange.

Trump-Era Policies Drive Meme Coin Momentum

Dogecoin's price has surged over 328% in the past 12 months, with a notable spike following the November 2024 U.S. election.

President Trump's support for cryptocurrencies, including the symbolic D.O.G.E. department, has spurred institutional interest. Since January, multiple asset managers have filed for meme coin ETFs.

Grayscale's Head of Product & Research, Rayhaneh Sharif-Askary, emphasized Dogecoin's utility in a press release:

"Dogecoin has matured into a potentially powerful tool for promoting financial accessibility. As a faster, cheaper, and more scalable derivative of Bitcoin, Dogecoin is helping groups underserved by legacy financial infrastructure participate in the financial system."

Inside the Dogecoin Trust

The Grayscale Dogecoin Trust operates similarly to its other single-asset products, providing daily subscriptions for qualified investors.

Unlike ETFs, the trust does not offer public trading, limiting access to accredited participants. Grayscale's XRP Trust, launched in 2024, serves as a potential blueprint.

Originally created as a joke in 2013, Dogecoin now ranks among the top 10 cryptocurrencies by market cap. Its price surge reflects growing acceptance, bolstered by endorsements from figures like Elon Musk and policy shifts under Trump. Its daily trading volume averages $1.5 billion, per CoinMarketCap data.

Regulatory Risks and DOGE ETF Speculation

Grayscale's XRP ETF filing signals ambition, but regulatory hurdles persist. The SEC has historically rejected crypto ETFs over market manipulation concerns. However, Trump's administration has encouraged innovation, prompting firms to test boundaries with meme coin products.

Analysts caution that meme coins remain volatile. DOGE price rose 0.94% following the trust's announcement, reflecting market sensitivity. Still, its $50 billion valuation underscores institutional confidence.

Grayscale's Dogecoin Trust highlights the blurring line between meme assets and institutional finance. With a $50 billion market cap and political tailwinds, Dogecoin's evolution from internet joke to financial tool exemplifies crypto's shifting landscape.

As regulators weigh ETF applications and Trump's policies unfold, Grayscale's bet on Dogecoin could redefine how institutions engage with once-niche digital assets.