"21Shares Seeks SEC Nod for Spot Polkadot ETF Amid Crypto Market Uncertainty"

21Shares Files with SEC for Spot Polkadot ETF Amid Market Uncertainty

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 Jan. 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 comes just four years after 21Shares launched a similar product in Switzerland. In Feb 2021, the asset manager launched the world’s first Polkadot ETP on the Swiss SIX exchange.

Polkadot, the 18th largest crypto by market capitalization, has seen its price performance underwhelm 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. At the time of publication, Polkadot was trading at $6.42.

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.”