Canary Capital Plans to Launch a PEPE-Based ETF

Canary Capital is seeking to launch an ETF tied to the PEPE token, aiming to provide investors with exposure to the memecoin without the need to purchase it directly. However, the initiative comes with significant risks.

Canary Capital Group has submitted an application to the U.S. Securities and Exchange Commission to establish the Canary $PEPE ETF. This marks only the initial stage of the approval process, and the product has not yet received regulatory clearance.

The proposed ETF would track the price of the $PEPE token by holding it directly. This structure would allow investors to gain exposure through a standard brokerage account, eliminating the need to buy and store the tokens themselves. The fund is not expected to use derivatives, which reduces certain financial risks.

According to the proposal, the ETF would be valued daily, with tokens held by a designated custodian. A small portion of the fund’s assets—up to 5%—would be kept in Ethereum to cover transaction fees. At the same time, operational costs could gradually reduce the number of tokens held, potentially making it harder to precisely mirror the token’s price.

A key part of the filing is its clear outline of risks. The document emphasizes that $PEPE has no inherent utility and its value is not based on practical use. Instead, its price largely depends on investor interest and speculative trends. Additionally, assets of this type have a short track record, and the market remains vulnerable to manipulation and sharp fluctuations.

Canary Capital’s application highlights a growing willingness among institutions to explore more speculative areas of the cryptocurrency market. At the same time, the filing makes it clear that investing in such a product involves high uncertainty and lacks strong fundamental backing.