Bonk Inu ETP aims to attract institutional capital despite memecoin volatility

Solana-based memecoin Bonk Inu (BONK) has launched an exchange-traded product (ETP) in the US. The team behind BONK disclosed the latest update at the Solana Breakpoint event in Singapore, noting the product would be Series 504 and 506 Trusts for institutional and retail investors.

According to the announcement , the ETP, which will trade under the BONK ticket, was created in partnership with Osprey Funds and will be available for trading on the over-the-counter (OTC) markets. However, there is no information yet on when the ETP will launch.

Although the announcement did not provide much information about the product, the news generated some excitement within the BONK community, causing the token to see a minor jump in value earlier today. However, it is already down almost 1% from that peak price, highlighting the generally poor performance of the memecoin, which is down 60% from its peak price.

Still, many believe the ETP is the start of something significant for the BONK memecoin, and the token could eventually launch an exchange-traded fund (ETF) when it becomes permissible.

Investors must put a minimum of $10,000 into BONK Trust

While the Bonk team announcement did not provide much information about the ETP, the trust sponsor, Osprey Fund, has provided more details about the product. According to the information on its website , the BONK Trust is only for accredited investors and will expose them to BONK by tracking the price of the memecoin.

However, the conditions for being an accredited investor are very stringent. A retail investor must earn at least $200k annually or $300k as a couple and have a net worth of over $1 million or be a licensed investment professional. Meanwhile, institutional investors must have at least $5 million in liquid assets, or all beneficial owners must be accredited investors for them to invest.

The minimum amount allowable for investment is $10,000, effectively cutting out the majority of memecoin traders who might be interested in the fud. However, it also means an inflow of institutional capital into the memecoin if it can generate enough interest from smart money with its 2.5% management fee.

Meanwhile, Copper is the custodian of the Trust, while Theorem Fund Services manages it. The fund is only available for private subscriptions, but the sponsor plans to apply for listing once it meets the OTC listing standards.

Crypto ETPs and ETFs gain popularity

The launch of BONK Trust aligns with the growing popularity of crypto-focused ETPs globally and in the US. Crypto ETPs gained mainstream adoption this year, with the Securities and Exchange Commission approving spot Bitcoin and Ether ETFs.

Over the year, the total assets under management (AUM) for crypto ETPs have soared, surpassing a record high of over $100 billion in March 2024. This represents around a 100% increase from the $51 billion in AUM for digital assets investment products at the end of 2023, highlighting the massive impact of the US SEC approvals.

Total Digital Asset ETPs passed the US$100bn mark for the first time ever – James Butterfill

Although the AUM for these products has now declined to $82.57 million due to outflows and the decline in crypto prices, the massive increase in AUM this year spotlights the success of crypto ETPs and the appetite of retail and institutional investors.

Presently, only Bitcoin and Ether have publicly approved ETFs trading in the US and account for the majority of this AUM. Still, asset managers and investors expect that other altcoins could join in the near future, particularly if Trump gets elected and deregulates the ETF approval process.