Dogecoin ETF Sees Strong Debut, But Rex-Osprey Is Already Plotting a Riskier DOJE Fund

Rex-Osprey’s DOJE, the first U.S. spot Dogecoin ETF, produced strong trading volumes when it hit the market on Thursday, landing in the top five for ETF rollouts so far this year. And its issuer has already filed for a riskier, leveraged play on it. 

In a filing registered with the SEC on Thursday, Rex-Osprey applied to launch the REX DOJE Growth & Income ETF, an exchange traded product that aims to offer between 105-150% exposure to the price return of DOJE on a single day.

“Because the fund seeks daily leveraged investment results, it is very different from most other exchange-traded funds,” the filing reads. “As a result, the fund may be riskier than alternatives that do not use leverage.”

The REX DOJE Growth & Income ETF portfolio will be composed of three separate components: leveraged long exposure in the underlying Dogecoin ETF (DOJE), a covered call strategy to generate income, and investment in short-term treasuries or money market funds.

Its primary objective is to pay weekly distributions, with a secondary objective of earning daily investment results between 1-1.5x the percent change of DOJE. 

The leveraged investment filing is not new to Rex-Osprey, which offers a variety of leveraged ETF plays, offering greater exposure but more risk for investors. 

Its latest prospectus makes it well known that this additional risk is not for everyone. 

“The fund is not suitable for all investors,” it reads. “The fund is designed to be utilized only by knowledgeable investors who understand the potential consequences of seeking targeted daily leveraged investment results, understand the risks associated with the use of leverage, and are willing to monitor their portfolios frequently.”

Because of the daily leveraged makeup, the firm also notes that beyond a single day the fund will lose if DOJE’s return is flat, and it’s also possible the Growth & Income ETF will lose even if the DOJE ETF increases over more than a day. 

Additionally, the prospectus indicates that there is no guarantee the strategy will be implemented properly, or that it will be able to pay weekly distributions.

Dogecoin (DOGE) is down 6% in the last 24 hours to $0.265. The leading meme coin has jumped more than 22% in the last month, but remains around 64% off its 2021 all-time high of $0.73.

Rex-Osprey’s standard DOJE ETF began trading on Thursday and generated about $17 million worth of trading volume, putting it in the top five for first-day volume among ETF launches this year, according to Bloomberg Senior ETF Analyst Eric Balchunas.

The Rex-Osprey XRP ETF, meanwhile, also launched on Thursday and saw much stronger demand, topping this year’s list of new fund rollouts with nearly $38 million in trading volume.