21Shares is Seeking the SEC Approval for the Listing of the Polkadot ETF.
21Shares, an Asset Management Firm, has sent a request to the U.S Securities and Exchange Commission (SEC) in order to open a Polkadot exchange-traded fund (ETF), hoping to gain approval. The Polkadot trust the firm is working on will be listed on the Cboe BZX Exchange where Coinbase will act as the orders buyer and keeper for the DOT holdings.
This step was taken after 21Shares had put the first foot forward to polkadot investment products. The company in February 2021 made a buzz by launching the very first Polkadot ETP on the SIX Exchange in Switzerland paving the way towards institutional investment towards the blockchain network.
Market Risk Consolidation Regarding a Polkadot ETF.
The market was slower than average for the polychain interoperability protocol Polkadot. The emerging blockchain technology head ranked 18th in market capitalization at the time of the news, with Dot declining by 5.16% during the year and 10.48% in the last month according to data from coinmarketcap.
Along with the Polkadot report for the BZX, 21Shares has claimed there are a great deal of open questions around the future value of the DOT and applying for the ETF could assist in the market performance of the token. The report said:
“There’s no guarantee that DOT will continue to be valuable in the long or short term.”
Assuming the DOT price drops, it’s expected that the value of the shares will drop as well.
James Seyffart, an ETF analyst from Bloomberg, made a remark regarding the filing stating that the success of a Polkadot ETF is heavily relying on the interest of the investors. He pointed out that the ETF cannot live if there is no interest, because without the investors, there is no market.
Other risks were also provided in the filing, namely the increased issuance of DOT tokens and the likelihood of classifying DOT as a security under U.S. law. The Web3 Foundation which administers the development of Polkadot network has raised a concern regarding security classification, saying that it is doing everything possible to reduce the chances of centralized control over the network.
Gensler’s Departure Has Triggered an Increase in Crypto ETF Filings
The filing by 21Shares seems to come in hand with a broad increase in crypto ETF applications that happened after the resignation of SEC Chair Gary Gensler on the cover of 20 January The sigh of relief from ETF issuers is because, Genslers altitude towards digital asset was quite cautious.
After a few minutes, Osprey Funds and REX Shares filed for meme coin ETFs with DOGE, TRUMP, and BONK along with the resignation. The other ETF bit that was recently approved is by SEC’s Bitwise Asset Management firm which is set to track BTC & ETH with its new bitcoin and ethereum ETF.
With the shift on the regulation side, the crypto investment landscape is changing very fast. Many more companies are looking to roll out crypto-focused financial products in the market. The prospects of a Polkadot ETF are unclear and will largely depend on market demand and developments within the industry.
