21Shares Seeks SEC Approval for Polkadot ETF Launch in Newest Submitting

Asset administration agency 21Shares has formally filed with the U.S. Securities and Trade Fee (SEC) to introduce a spot Polkadot exchange-traded fund (ETF).

Based on the Jan. 31 SEC submitting, the proposed 21Shares Polkadot Belief can be listed on the Cboe BZX Trade, with Coinbase designated because the custodian for DOT holdings.

The event follows 21Shares’ earlier foray into Polkadot funding merchandise.

In February 2021, the agency made historical past by launching the world’s first Polkadot exchange-traded product (ETP) on Switzerland’s SIX Trade, bringing institutional funding publicity to the blockchain community.

Market Uncertainty Surrounding Polkadot ETF

Polkadot, at the moment ranked 18th by market capitalization, has confronted sluggish worth efficiency regardless of its potential as a multi-chain interoperability protocol.

CoinMarketCap information exhibits that DOT has misplaced 5.16% over the previous yr and has seen a ten.48% decline within the final month.

Given this volatility, 21Shares acknowledged in its submitting that there is no such thing as a assure of future worth appreciation, cautioning that the ETF’s success can be immediately tied to Polkadot’s market efficiency.

“There is no such thing as a assurance that DOT will preserve its worth within the lengthy or intermediate time period,” the submitting acknowledged.

“Within the occasion that the worth of DOT declines, the Sponsor expects the worth of the Shares to say no proportionately.”

Bloomberg ETF analyst James Seyffart weighed in on the submitting, emphasizing that market demand will finally decide whether or not a spot Polkadot ETF is sustainable.

“The market will resolve the place worth lies and if there’s worth in launching such a product. If nobody places cash right into a Polkadot ETF—it would shut. Persons are free to launch no matter ETFs are deemed to be allowed by the SEC,” Seyffart acknowledged in a Jan. 31 submit on X.

The submitting additionally outlined a number of potential dangers related to Polkadot’s community, together with considerations about an elevated provide of DOT tokens in circulation and the potential for DOT being categorized as a safety beneath U.S. federal regulation.

In February 2023, the Web3 Basis, which oversees the Polkadot protocol, pushed again towards the safety classification considerations.

The muse asserted that it had rigorously managed DOT distribution to stop any single entity from gaining extreme management over the community.

Moreover, it acknowledged that it had rejected investment-only purchases from enterprise capitalists, focusing as a substitute on selling Polkadot’s expertise reasonably than its token worth.

Crypto ETF Filings Surge Following Gensler’s Departure

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

Gensler, identified for his cautious stance on crypto laws, stepped down amid rising stress for better regulatory readability within the digital asset house.

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

In the meantime, the SEC has additionally granted preliminary approval for Bitwise Asset Administration’s Bitcoin and Ethereum ETF, which might observe each BTC and ETH in a single fund—one other important step within the evolving panorama of crypto-based monetary merchandise.

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