21Shares files for Polkadot ETF amid altcoin fund surge

Asset management firm 21Shares has filed its S-1 registration statement for the Polkadot ETF offering with the US Securities and Exchange Commission (SEC). This DOT-focused ETF is one of the more unusual crypto ETF applications made to the regulator this week.

The 21Shares Polkadot ETF will track DOT prices using the CME CF Polkadot-Dollar Reference Rate. In addition to these updates, 21Shares noted that it will tap Coinbase Custody Trust Company, LLC, which will hold the assets for the ETF product if approved. 

21Shares files Polkadot ETF while competition in the crypto ETF space grows

As per the S-1 filing, 21Shares said the firm plans to list the Polkadot ETF on the Cboe BZX Exchange. The asset manager noted that the fund is a passive investment that does not seek to generate returns beyond tracking the price of DOT. Therefore, 21Shares pointed out that the funds will not conduct speculative trading, for instance, buying DOT low and selling high. 

21Shares  informed potential investors that it would not pursue its investment objectives through leverage or derivative products. Instead, it will exclusively track the price of DOT as listed on the CME CF Polkadot-Dollar Reference Rate.

The firm characterized the protocol as a decentralized, distributed computing platform that functions on a peer-to-peer network.

The 21Shares filing follows Tuttle Capital Management’s proposal earlier this week for a 2x leveraged Polkadot ETF, which was part of a broader package of 10 leveraged crypto ETFs. Yet, ETF analyst Eric Balchunas confirmed that Tuttle Capital has withdrawn its filing for all 2x leveraged ETFs.

This is not the first time 21Shares’ filing has been featured on the ETF front this week. As reported earlier, the Cboe exchange refiled its Solana 19b-4 application alongside those of VanEck, Canary Capital, and Bitwise.

A few hours ago, Grayscale also launched a Dogecoin Trust. The trust offers investors exposure to DOGE with a 2.5% management fee amid rising demand. Shortly after, Grayscale converted the trust filing into an ETF application. This was likely the first time a trust had been converted into an ETF on the same day. Eric Balchunas. Wrote: 

Man, the jockeying is intense. I’ve never heard of a trust launching and then looking to convert to ETF the same day. But they may now be in pole position in 19b-4 race. Also, we now up to four Doge ETF filings (including 2x). Gensler has only been gone for like two weeks.

Eric Balchunas

Grayscale also filed ETF applications for XRP, Litecoin, and Solana. The firm recently launched a Bitcoin Miners ETF, which provides exposure to Bitcoin-related companies without directly investing in cryptocurrency. This fund is designed to appeal to traditional investors.

Trump’s appointments boost crypto industry, but Polkadot faces setbacks

Things have started to look up in the crypto industry since President Donald Trump’s inauguration. First, the president appointed Mark Uyeda as acting Chairman of the US SEC and tapped Caroline Pham as the Commodity Futures Trading Commission (CFTC) Chair. Mark Uyeda is leading the SEC on an interim basis as Paul Atkins, President Trump’s nominee, awaits the congressional process to become the permanent chair.

The new appointees have already shown signs of being open to engaging with the crypto industry. In addition to establishing the Crypto Task Force, Mark Uyeda’s SEC has approved its first digital currency ETF product.

Given this precedent, speculation is high that most of the newly filed crypto ETF products will also be approved.

Interestingly, Polkadot’s price has shown no reaction to ETF news. Polkadot, the 18th largest cryptocurrency by market capitalization, has seen disappointing price performance lately. According to CoinMarketCap data, its price has dropped by 5.16% over the past 12 months and 10.48% in the last month.

The filing highlighted potential risks related to the Polkadot Network, including the possibility of an increase in the supply of DOT available for trading and the potential classification of DOT as a security “under federal laws.”

It also cautioned that Polkadot’s price performance, whether in the short or long term, following the ETF launch is not guaranteed. As per the filing, there is no assurance that DOT will maintain its value in the long or intermediate term.

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