What Happened?
Digital asset investment firm Canary Capital has submitted application documents, aiming to launch the “PENGU ETF,” which involves the Pudgy Penguins project. This will be the first cryptocurrency ETF related to NFTs.
The ETF will primarily invest in the Pudgy Penguins NFT series and the project’s native token, $PENGU, while also holding Solana (SOL) and Ethereum (ETH) tokens.
Following the announcement of the ETF application, the price of $PENGU and the floor price of Pudgy Penguins NFTs saw a slight increase. The project’s CEO stated that this is a historic moment.
Canary Capital Submits Pudgy Penguins ETF Application
Digital asset investment firm Canary Capital has officially submitted an S-1 form to the U.S. Securities and Exchange Commission (SEC) with the purpose of applying for a PENGU ETF that includes Pudgy Penguins NFTs and the project’s native token, $PENGU.
This ETF will primarily invest in the Pudgy Penguins NFT series and $PENGU. Additionally, the fund will hold two cryptocurrencies, Solana (SOL) and Ethereum (ETH), to support the purchase, sale, and transfer of $PENGU and NFTs.
$PENGU is the governance token in the Pudgy Penguins ecosystem, currently valued at approximately $435 million. According to reports from foreign media, after the ETF application news was made public, the price of $PENGU rose by over 7%, reaching $0.0073, while the floor price of Pudgy Penguins NFTs increased by more than 0.5 Ethereum during the same period.
Luca Netz, CEO of Pudgy Penguins, also shared the submitted form from Canary Capital on X, calling it “a historic moment,” as this is the first cryptocurrency ETF involving an NFT project.
Furthermore, the project’s parent company, Igloo Inc., believes that Pudgy Penguins symbolizes the mainstream and large-scale application of blockchain technology. Their inclusion in the ETF application documents demonstrates their confidence in the project.
Market Demand Uncertain?
In fact, this is not the first time Canary Capital has submitted applications for relatively “niche” crypto ETFs. For instance, the Hedera (HBAR) ETF in November 2024, and the recent Axelar (AXL) and Sui (SUI) ETFs, indicate Canary Capital’s ambition to break traditional boundaries. The company aims to expand the scope of investors beyond mainstream assets like Bitcoin (BTC) and Ethereum while testing the SEC’s response to such innovative products.
Nevertheless, crypto researcher Alex Krüger expressed on X, “After the PENGU ETF application news was released, the price didn’t rise much; new crypto ETFs have essentially become a trivial joke.” He believes such products cannot successfully attract significant assets under management (AUM) for issuers, leading to financial losses.
Moreover, the fluctuating policies of the U.S. government leave the regulatory environment for cryptocurrencies unclear. Although the Trump administration expressed a desire to make the U.S. the “global crypto capital,” over 100 enforcement actions against crypto companies have been initiated by U.S. regulatory agencies during President Biden’s term, creating uncertainty about the future regulations of crypto products.
However, despite mixed market reactions, Canary Capital’s innovative move has quietly opened a new chapter for crypto asset investment and sparked further discussions regarding the feasibility of digital asset investments.
Source: Cointelegraph, CryptoSlate