Asset management firm 21Shares has filed with the SEC to launch a Polkadot spot ETF. This move involves collaboration with Coinbase, which will act as DOT custodian.
The market will decide the fate of Polkadot ETF
Polkadot ranks 18th by market capitalization among cryptocurrencies, but its recent price performance has been underwhelming. Over the past year, its price fell 5.16%, and it was down 10.48% last month. The filing notes no guarantee that launching the ETF will enhance DOT's price performance. Bloomberg ETF analyst James Seyffart stated that it's the market that will determine the product's demand: "If no one invests in a Polkadot ETF, it will close."
Security concerns
The filing highlighted risks associated with the Polkadot Network, such as a potential increase in DOT supply and the risk of it being classified as a security. The Web3 Foundation, supporting the Polkadot protocol, argued in 2023 that it has taken steps to manage DOT token distribution to avoid large holders' dominance.
Aftermath of Gary Gensler's departure
Recent events, including Gary Gensler's resignation as SEC chair, have influenced filing activity for ETFs. Within a day of his departure, new filings for meme coin ETFs were submitted by Osprey Funds and REX Shares. SEC also recently approved an ETF that combines Bitcoin and Ethereum.
The final decision on the new ETF filing remains with the market and the SEC. This process may mark another step in the development of cryptocurrency-based investment products.
