Canary Capital Files for a Spot PEPE ETF in the U.S.: What You Need to Know
Asset management firm Canary Capital has officially filed an S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) to launch an exchange-traded fund (ETF) tied to the PEPE memecoin. If approved, it would represent one of the first institutional-grade investment vehicles directly linked to a memecoin.
A First in the Crypto ETF Landscape
On April 8, 2026, Canary Capital submitted its S-1 registration with the SEC’s Division of Corporation Finance for the « CANARY PEPE ETF, » according to the agency’s official filings. The fund would aim to track PEPE’s performance by holding the underlying digital assets with a qualified custodian. The filing notes that the trust may hold up to 5% of its assets in Ether (ETH) to cover transaction fees on the Ethereum network.
This marks a significant step in an era where crypto ETFs have so far focused primarily on Bitcoin and Ethereum — the two assets deemed most likely to meet the SEC’s requirements around market surveillance, liquidity, and resistance to manipulation.
PEPE: An Atypical Asset for an ETF
PEPE is a frog-themed memecoin that gained traction on social media starting in 2024. With a market capitalization of approximately $3.5 billion, it ranks among the world’s top 50 cryptocurrencies — far behind Dogecoin (DOGE) at roughly $22 billion, but ahead of many other tokens in the sector.
The filing document warns investors about several asset-specific risks. Canary Capital notes that ownership of the token remains highly concentrated: « As of January 2026, the ten largest PEPE wallet addresses collectively held approximately 41% of the total circulating supply. » The trust also warns that PEPE has no underlying revenue mechanism, active governance, or staking utility, making long-term valuation highly speculative.
The token is also down nearly 85% from its December 2024 all-time high of $0.00002368. According to Etherscan data, PEPE currently has 513,392 holders.
A Surprisingly Muted Market Reaction
Despite the symbolic significance of the filing, the market did not respond with the enthusiasm typically seen in comparable announcements for Bitcoin or Ethereum. PEPE’s price fell 4.58% the day after the filing, and the decline continued through the week amid broader market pressures from geopolitical uncertainty.
Technical and derivatives indicators paint a mixed picture. On the technical side, PEPE is trading below its 50-day Exponential Moving Average (EMA) around $0.0000036. The daily Relative Strength Index (RSI) hovers around 50, pointing downward toward neutral territory, signaling fading bullish momentum. However, the MACD indicator issued a bullish crossover the previous week, which remains valid at this stage.
On the derivatives side, the signals are decidedly bearish. Open interest in PEPE fell 11.93% to $189.26 million, indicating fewer leveraged positions are open. Trading volume dropped 39.44% to $514.15 million. The long/short ratio on CoinGlass reads 0.81 on Thursday — its lowest level in over a month, reflecting growing bearish sentiment. Funding rates have flipped negative at -0.0081%, with short positions paying the long positions.
Canary Capital: A Specialist in Alternative ETFs
This move is part of Canary Capital’s broader strategy, as the firm already offers several crypto ETF products targeting a range of assets. The company has filed for ETFs tied to XRP, Solana (SOL), Hedera (HBAR), and Sei (SEI). In November 2025, it had already filed to launch an ETF tracking Mog Coin, the 353rd-largest token by market cap — a notably smaller asset than PEPE.
Grayscale’s Dogecoin ETF made its debut in November but fell well short of initial expectations. ETF analyst Eric Balchunas had predicted at least $12 million in first-day volume. The product ultimately recorded just $1.4 million on its opening day.
What’s Next for Altcoin ETFs?
The question of whether a true altcoin cycle will materialize remains open. Several analysts believe the next cycle will depend on new crypto ETFs launching further down the risk curve, giving institutional investors exposure to riskier assets.
Fabian Dori, Chief Investment Officer at Sygnum Bank, told Cointelegraph in December that the number of new ETF filings is expected to surge in 2026, driven by U.S. crypto regulation. « On the basis of the potential passing of the Clarity Act, we would expect that new filings continue to go beyond BTC and ETH, » he said.
That said, Matt Hougan, Chief Investment Officer at Bitwise, offered a more cautious outlook in March, stating that traditional altcoin cycles are over and that institutional investors are now focused on yield-bearing instruments or crypto assets that capture revenue.
The regulatory path ahead remains uncertain. The SEC must evaluate market surveillance agreements, custody solutions, and the underlying asset’s liquidity. For a token like PEPE, the absence of a regulated futures market represents an additional hurdle — the SEC has previously used such markets as benchmarks when evaluating spot products.
The road to approval is long and far from certain for Canary Capital. But the mere filing of an S-1 confirms the growing appetite of traditional finance to gain exposure to the most speculative corner of the crypto market.
PEPE was trading around $0.00000348 at the time of writing, up 6.06% over the past 30 days.
