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"21Shares Files for Polkadot ETF Amidst Price Slump"

Coin WorldFriday, Jan 31, 2025 9:28 pm ET

1min read

Asset management firm 21Shares has filed with the U.S. Securities and Exchange Commission (SEC) to launch a spot Polkadot exchange-traded fund (ETF). In a Jan. 31 SEC filing, 21Shares stated its intention to list the 21Shares Polkadot (DOT) Trust on the Cboe BZX exchange, with cryptocurrency exchange Coinbase acting as the DOT custodian.

Polkadot is the 18th largest crypto by market capitalization, but its price performance has been underwhelming in recent times. Over the past 12 months, its price has fallen 5.16%, and it’s down 10.48% in the last month, according to CoinMarketCap data. Polkadot is trading at $6.42 at the time of publication.

The filing warned that there’s no guarantee of Polkadot’s price performance, either in the short or long term, after the ETF launches. “There is no assurance that DOT will maintain its value in the long or intermediate term,” the filing said. “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 said, in the end, the market will decide if there’s demand for a spot Polkadot ETF. “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 Xpost.

The filing outlined potential risks associated with the Polkadot Network. These included a potential increase in the DOT supply available for trading, and the possibility of DOT being classified as a security “under federal laws.”

The Web3 Foundation, which supports the Polkadot protocol, argued against DOT being a security in February 2023, stating that it had taken steps to manage the distribution of the DOT token so that no individual holds a large percentage of the network. It also said it turned down purchases from venture capitalists interested solely in investment purposes, and focused more

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