YEREVAN (CoinChapter.com) – 21Shares has submitted a filing to the U.S. Securities and Exchange Commission (SEC) for a spot Polkadot ETF. According to the Jan. 31 filing, the 21Shares Polkadot Trust aims to be listed on the Cboe BZX exchange, with Coinbase acting as the custodian for Polkadot (DOT).
This marks another attempt by asset managers to introduce crypto ETFs in the U.S. Previously, in February 2021, 21Shares launched a Polkadot ETP on the Swiss SIX exchange, providing European investors with exposure to DOT.
Polkadot ETF Faces Market Uncertainty
Polkadot (DOT) is currently the 18th largest cryptocurrency by market capitalization. However, its price has declined in recent months. Over the last 12 months, DOT’s value dropped 5.16%, and in the past month, it has fallen 10.48%, according to CoinMarketCap.
At the time of publication, Polkadot is trading at $6.42. The SEC filing highlights the uncertainty in Polkadot’s price performance, stating:
“There is no assurance that DOT will maintain its value in the long or intermediate term. In the event that the price of DOT declines, the Sponsor expects the value of the Shares to decline proportionately.”
Spot Polkadot ETF’s Market Demand Is Unclear
Bloomberg analyst James Seyffart commented on the potential demand for a spot Polkadot ETF, noting that the market will ultimately determine its success.
“The market will decide where value lies and if there’s value in launching such a product. 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 said in a Jan. 31 post on X.
Polkadot Security Classification and Regulatory Risks
The filing outlines potential risks related to Polkadot’s legal status. If the SEC classifies DOT as a security, the regulatory landscape could shift. Additionally, an increase in DOT’s circulating supply could impact the ETF’s performance.
The Web3 Foundation, which supports Polkadot, previously addressed this issue. In February 2023, the foundation stated that DOT is not a security. It also emphasized that it had taken steps to distribute DOT fairly to prevent any single entity from holding too much control. The foundation further stated that it had declined investments from venture capital firms interested solely in financial returns.
Crypto ETF Filings Rise After SEC Leadership Change
The 21Shares Polkadot ETF filing follows the resignation of SEC Chair Gary Gensler on Jan. 20. After his departure, several crypto ETF filings were submitted.
On Jan. 21, Osprey Funds and REX Shares filed for ETFs linked to Dogecoin (DOGE), Official Trump (TRUMP), and Bonk (BONK). More recently, the SEC granted initial approval for Bitwise Asset Management’s ETF, which will track both Bitcoin (BTC) and Ethereum (ETH) prices in a single fund.
The SEC’s response to the 21Shares Polkadot ETF remains pending, while the number of crypto ETF applications continues to grow.