A large player in crypto asset management Grayscale Investments has just pressed play on the Grayscale Dogecoin Trust; a new way for investors to put their stake into Dogecoin (DOGE) without actually buying the coin. This could be a huge move for Dogecoin’s future.
What is the Grayscale Dogecoin Trust?
An investment fund holding only Dogecoin is the Grayscale Dogecoin Trust. The company is meant only for accredited investors; customers are at least wealthy individuals or big institutional financial companies. So the idea here is to let these investors be part of Dogecoin’s success but do not need to buy and store the crypto themselves.
In the press release, Rayhaneh Sharif Askary, Head of Product & Research at Grayscale, says that Dogecoin has reached beyond the limits as a meme coin. According to her, its speed, low transaction costs and accessibility make it an important asset; to ensure financial inclusion to people who do not have access to traditional banks.
What Makes This Important?
By its move, Grayscale has proved that Dogecoin is beginning to appear to institutional investors as a legitimate asset. Originally started as a fun cryptocurrency, Dogecoin has gained ground as a financial tool that is with time being taken seriously.
Grayscale even hinted that this trust could one day turn into an ETF (Exchange-Traded Fund), something that enables common people to invest in crypto much more easily. But, that requires that it be approved by regulatory agencies such as the U.S. Securities and Exchange Commission (SEC).
What Are the Risks?
In his warning, Grayscale notes that the Dogecoin Trust is speculative and risky. As it is a closed end fund, investors do not get the flexibility to sell their shares whenever they want. Also, depending on the price of a dogecoin, it is possible for the value of shares to not be equal to the actual price of Dogecoin.
The Future of Dogecoin Investments
Dogecoin is not only Grayscale’s interest rate. Bitwise is another company that recently filed for a Dogecoin ETF which would let even more people invest in DOGE.
And for now, the Grayscale Dogecoin Trust is only open to big investors. However, if the crypto market continues to grow, we could begin to see much more opportunity for people to purchase Dogecoin in a safer and easier way.
Also read: Purpose Investments Files for World’s First XRP ETF in Canada
