Yerevan (CoinChapter.com) - 21Shares has filed an application with the U.S. Securities and Exchange Commission (SEC) for a Polkadot spot exchange-traded fund (ETF). According to the application on January 31, the 21Shares Polkadot Trust aims to be listed on the Cboe BZX exchange, and Coinbase will act as the custodian of Polkadot (DOT).


This marks another attempt by an asset management company to introduce a cryptocurrency ETF in the U.S. Previously, in February 2021, 21Shares launched the Polkadot ETP on the Swiss SIX Exchange, providing European investors with exposure to DOT.

Polkadot ETF faces market uncertainty
Polkadot (DOT) is currently the 18th largest cryptocurrency by market cap. However, its price has declined in recent months. According to CoinMarketCap, DOT’s value has fallen by 5.16% in the past 12 months and by 10.48% in the past month.


As of publishing time, Polkadot is trading at $6.42. The SEC filing highlights the uncertainty of Polkadot’s price performance, stating:

“There is no guarantee that DOT will maintain its value in the long or medium term. If the price of DOT declines, the Sponsor expects the value of the Shares to decline accordingly.”

Market demand for spot Polkadot ETFs is unclear
Bloomberg analyst James Seyffart commented on the potential demand for a spot Polkadot ETF, noting that the market will ultimately determine its success.

“The market will decide where the value is and whether it’s worth launching a product like this. If no one invests in the Polkadot ETF, it will shut down. People are free to launch any ETF that is approved by the SEC.”
Seifhat said in a January 31 article.

Polkadot’s Security Classification and Regulatory Risks
The application outlines potential risks associated with Polkadot’s legal status. If the SEC classifies DOT as a security, the regulatory environment could change. In addition, the increase in the circulating supply of DOT could affect the performance of the ETF.
The Web3 Foundation, which supports Polkadot, has previously addressed this issue. The foundation stated in February 2023 that DOT is not a security. It also emphasized that it has taken steps to fairly distribute DOT to prevent any single entity from controlling too much. The foundation further stated that it has rejected investments from venture capital firms that are only interested in financial returns.

The 21Shares Polkadot ETF application is still awaiting a response from the SEC after SEC Chairman Gary Gensler resigned on January 20. The number of applications for cryptocurrency ETFs continues to increase. Most recently, the SEC approved Bitwise Asset Management's ETF, which will track the prices of both Bitcoin (BTC) and Ethereum (ETH).