• 21Shares has filed with the SEC to launch a spot Polkadot ETF, with Coinbase serving as the custodian and plans to list on the Cboe BZX exchange.
  • The filing acknowledges potential risks, including price volatility and regulatory uncertainty, as the market determines demand for a Polkadot ETF.

Asset management firm 21Shares has submitted a filing to the U.S. Securities and Exchange Commission (SEC) to launch a spot Polkadot exchange-traded fund (ETF).

According to the Jan. 31 filing, the proposed 21Shares Polkadot Trust would be listed on the Cboe BZX exchange, with cryptocurrency exchange Coinbase acting as the custodian for Polkadot (DOT).

This development comes four years after 21Shares introduced a similar product in Switzerland. In February 2021, the firm launched the world’s first Polkadot exchange-traded product (ETP) on the Swiss SIX exchange.

Polkadot, currently the 18th-largest cryptocurrency by market capitalization, has experienced price fluctuations in recent months. CoinMarketCap data shows that DOT’s price has dropped by 5.16% over the past year and 10.48% in the last month. At the time of publication, Polkadot was trading at $6.42.

The SEC filing acknowledges uncertainties surrounding Polkadot’s future price movements.

“There is no assurance that DOT will maintain its value in the long or intermediate term,” the filing states. “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 commented on the potential market reception of the 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 stated in a Jan. 31 post on X.

The filing also outlines risks associated with the Polkadot network, including a potential increase in DOT’s circulating supply and the possibility of it being classified as a security under federal law.

The Web3 Foundation, which supports Polkadot’s development, previously disputed such concerns. In February 2023, it stated that efforts were made to decentralize DOT’s distribution to prevent any single entity from controlling a large share of the network.

The filing comes shortly after the resignation of SEC Chair Gary Gensler on Jan. 20. His departure has led to a surge in crypto ETF filings. Just a day later, asset managers Osprey Funds and REX Shares submitted applications for ETFs focused on memecoins, including Dogecoin (DOGE), Official Trump (TRUMP), and Bonk (BONK).

Meanwhile, the SEC recently granted initial approval to Bitwise Asset Management’s “Bitwise Bitcoin and Ethereum ETF,” which aims to track Bitcoin (BTC) and Ether (ETH) in a single fund.

Edited by Harshajit Sarmah