Asset management firm 21Shares has approached the U.S. Securities and Exchange Commission (SEC) with an S-1 registration statement to introduce Polkadot exchange-traded fund (ETF) options.
The ETF proposal will implement tracking of DOT prices by following the CME CF Polkadot-Dollar Reference Rate. When it receives approval, the proposed fund will have Coinbase Custody Trust Company, LLC, act as the custodian for its assets.
21Shares plans to list Polkadot ETF on the Cboe BZX exchange
The filing shows 21Shares plans to obtain Cboe BZX Exchange authorization to list the ETF. The fund functions as an investment tool that tracks DOT prices without pursuing active trading techniques according to company specifications. The firm declared that it will operate without leverage or derivative strategies for its investment goals.
The document explains Polkadot’s function as a decentralized peer-to-peer computing network. It exposes two main vulnerabilities: variations in DOT trading supply and uncertain legal designation of DOT as a security within U.S. jurisdiction.
Polkadot ETF Filing comes amid increased competition in crypto ETFs
An application for the 21Shares Polkadot ETF emerged after Tuttle Capital Management failed to launch its 2x leveraged Polkadot ETF. Tuttle Capital decided to discontinue all propositions of its 10 leveraged crypto ETFs after initially submitting its proposal. Electronic fund trusts based on cryptocurrency have emerged as part of a growing crypto exchange-traded fund development trend. The Cboe exchange returned its Solana 19b-4 application for approval and other applications from VanEck, Canary Capital, and Bitwise.
The Grayscale company evolved its ETF suite by converting its Dogecoin Trust into a new application for an ETF. One of the fastest-moving conversions from trust to ETF was observed when the trust launched, quickly followed by its transformation to an ETF. Additionally, Grayscale made ETF proposals to list XRP and Litecoin alongside Solana. Companies can now access Bitcoin-related industries by investing in the Bitcoin Miners ETF, which exposes them to Bitcoin-related firms.
Regulatory changes and market impact on polkadot
Since Donald Trump resumed the White House presidency, the crypto regulation process has changed significantly. Mark Uyeda now serves as acting chairman of the SEC alongside Caroline Pham, who leads the Commodity Futures Trading Commission (CFTC) as its current chair. Digital currency ETFs are expected to gain SEC approval within the short term based on Uyeda’s leadership approval of the initial digital currency ETF.
The progression of Polkadot did not impact its price in any significant way after the ETF filing announcement. Market data from CoinMarketCap shows DOT occupies position 18 among cryptocurrencies after suffering a 5.16% reduction since last year and a 10.48% decrease in the recent month.
The ETF filing is an important move for Polkadot, but 21Shares cautions that the fund’s approval might not create permanent changes in DOT price. According to the firm, market conditions and regulatory decisions represent factors that might alter the long-term value of the asset.