21Shares Seeks SEC Approval for Polkadot ETF Launch in Latest Filing

Asset management firm 21Shares has officially filed with the U.S. Securities and Exchange Commission (SEC) to introduce a spot Polkadot exchange-traded fund (ETF).

According to the Jan. 31 SEC filing , the proposed 21Shares Polkadot Trust would be listed on the Cboe BZX Exchange, with Coinbase designated as the custodian for DOT holdings.

The development follows 21Shares’ earlier foray into Polkadot investment products.

In February 2021, the firm made history by launching the world’s first Polkadot exchange-traded product (ETP) on Switzerland’s SIX Exchange, bringing institutional investment exposure to the blockchain network.

Market Uncertainty Surrounding Polkadot ETF

Polkadot, currently ranked 18th by market capitalization, has faced sluggish price performance despite its potential as a multi-chain interoperability protocol.

CoinMarketCap data shows that DOT has lost 5.16% over the past year and has seen a 10.48% decline in the last month.

Given this volatility, 21Shares acknowledged in its filing that there is no guarantee of future price appreciation, cautioning that the ETF’s success will be directly tied to Polkadot’s market performance.

“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 weighed in on the filing, emphasizing that market demand will ultimately determine whether a spot Polkadot ETF is sustainable.

“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 stated in a Jan. 31 post on X.

The filing also outlined several potential risks associated with Polkadot’s network, including concerns about an increased supply of DOT tokens in circulation and the possibility of DOT being classified as a security under U.S. federal law.

In February 2023, the Web3 Foundation, which oversees the Polkadot protocol, pushed back against the security classification concerns.

The foundation asserted that it had carefully managed DOT distribution to prevent any single entity from gaining excessive control over the network.

Additionally, it stated that it had rejected investment-only purchases from venture capitalists, focusing instead on promoting Polkadot’s technology rather than its token price.

Crypto ETF Filings Surge Following Gensler’s Departure

21Shares’ latest filing comes at a pivotal time for the SEC and cryptocurrency ETFs, following the resignation of SEC Chair Gary Gensler on Jan. 20.

Gensler, known for his cautious stance on crypto regulations, stepped down amid increasing pressure for greater regulatory clarity in the digital asset space.

His departure has triggered a wave of new crypto ETF filings, including Osprey Funds and REX Shares, which filed for meme coin ETFs covering Dogecoin (DOGE) , Official Trump (TRUMP), and Bonk (BONK) on Jan. 21.

Meanwhile, the SEC has also granted initial approval for Bitwise Asset Management’s Bitcoin and Ethereum ETF, which would track both BTC and ETH in a single fund—another significant step in the evolving landscape of crypto-based financial products.