Michaela
Asset management firm 21Shares has filed with the U.S. Securities and Exchange Commission (SEC) for approval of a spot Polkadot exchange-traded fund (ETF), which, if approved, would be listed on the Cboe BZX Exchange.
In a filing on January 31, the firm proposed the 21Shares Polkadot Trust, with cryptocurrency exchange Coinbase serving as the custodian for the DOT holdings.
This move builds on 21Shares’ previous efforts to expand Polkadot investment options. In February 2021, the firm made a significant mark by launching the first-ever Polkadot exchange-traded product (ETP) on Switzerland’s SIX Exchange, offering institutional investors a new way to engage with the blockchain network.
Polkadot Filing Faces Market Uncertainty and Criticism
Despite its promise as a multi-chain interoperability protocol, Polkadot, currently ranked 18th by market capitalization, has experienced slow price growth.
According to CoinMarketCap data, DOT has dropped 5.16% over the past year and experienced a 10.48% decline in the last month. In light of this volatility, 21Shares noted in its filing that the ETF’s success depends on Polkadot’s market performance, emphasizing that future price growth is not guaranteed.
“There is no assurance that DOT will maintain its value in the long or intermediate term,” the filing stated. “In the event that the price of DOT declines, the Sponsor expects the value of the Shares to decline proportionately.
Bloomberg ETF analyst James Seyffart shared his insights on the filing in a post on X. Seyffart commented that 21Shares’ filing has received some of the most negative reactions he’s ever seen for an ETF submission on social media. He also noted that the market will ultimately determine the product’s value and whether launching it proves worthwhile.
“If no one puts money into a Polkadot ETF — it will close. People are free to launch whatever ETFs are deemed to be allowed by the SEC,” Seyffart wrote.
The filing also emphasized several risks linked to Polkadot’s network, such as the potential for a rise in the supply of DOT tokens and the uncertainty surrounding the classification of DOT as a security under U.S. law.
Rise in Crypto ETF Filings Following Gensler Departure
Following Gary Gensler’s departure as SEC Chair on January 20, the cryptocurrency industry has seen a significant surge in filings for cryptocurrency ETFs.
Asset management firms are now submitting proposals for various crypto-focused ETFs, ranging from those targeting established coins like Bitcoin and Ethereum, to those focusing on altcoins such as Solana, XRP, and even meme coins like Dogecoin.
This influx signals growing confidence that the regulatory landscape under the new leadership could be more favorable for crypto investments.
The increase in filings reflects the industry’s optimism that with a more crypto-friendly approach, the SEC could grant approval for more diverse crypto investment products. The filings also align with broader market expectations that a new regulatory framework could spur further growth in the digital asset sector, making it more accessible to traditional investors.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
