Quickly understand the history and background of various well-known coins

"21Shares Seeks SEC Nod for Spot Polkadot ETF"

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

1min read

21Shares Submits Spot Polkadot ETF Filing to the SEC

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

The proposed ETF aims to track the price of Polkadot's native token, DOT, using the CME CF Polkadot-Dollar Reference Rate. The fund will follow a passive investment strategy, avoiding leverage, derivatives, and active trading. Notably, Polkadot's price has not reacted to this announcement, remaining down by 10% in January.

Bloomberg ETF analyst James Seyffart commented on the filing, stating that the market will ultimately decide the value of the proposed product. He noted, "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."

The filing also highlights potential risks associated with the Polkadot Network, including fluctuations in the availability of DOT tokens for trading and regulatory concerns regarding its classification. The Web3 Foundation, which supports Polkadot's protocol, has argued against classifying DOT as a security, stating that it has taken steps to manage the distribution of the DOT token to prevent a single entity from controlling a substantial portion of the network.

The recent resignation of crypto skeptic Gary Gensler as SEC chair has triggered a wave of crypto ETF filings, both before and after his departure. Alongside 21Shares' Polkadot ETF proposal, other asset managers have also pursued ETF setups, diversifying into more speculative currencies such as Dogecoin and Bonk. Additionally, the SEC has provisionally approved Bitwise Asset Management's hybrid ETF aimed at tracking Bitcoin and Ethereum, suggesting an increasing acceptance of cryptocurrency-linked financial products.

The success of the proposed Polkadot ETF will depend on market forces

Disclaimer: The news articles available on this platform are generated in whole or in part by artificial intelligence and may not have been reviewed or fact checked by human editors. While we make reasonable efforts to ensure the quality and accuracy of the content, we make no representations or warranties, express or implied, as to the truthfulness, reliability, completeness, or timeliness of any information provided. It is your sole responsibility to independently verify any facts, statements, or claims prior to acting upon them. Ainvest Fintech Inc expressly disclaims all liability for any loss, damage, or harm arising from the use of or reliance on AI-generated content, including but not limited to direct, indirect, incidental, or consequential damages.