21Shares just made some noise by filing with the SEC to launch a spot Polkadot ETF. So maybe Polkadot is getting its own ETF finally?
Cboe listing, Coinbase custody
In their filing on January 31, 21Shares revealed plans to list the 21Shares Polkadot Trust on the Cboe BZX exchange, with Coinbase stepping in as the custodian for all those DOT tokens.
This move comes just four years after they launched a similar product in Switzerland, back in February 2021, they introduced the world’s first Polkadot ETP on the Swiss SIX exchange.
But what does numbers say? Polkadot currently sits as the 18th largest cryptocurrency by market cap, but it hasn’t exactly been riding a wave of success lately. Over the past year, its price has dipped by 5.16%, and it’s taken an even bigger hit of 10.48% in just the last month.
Up and down
In their filing, 21Shares made it crystal clear, there’s no guarantee that DOT will keep its value after the ETF launches, but yes, we know this already. They warned investors that if DOT’s price drops, so will the value of your shares.
Bloomberg ETF analyst James Seyffart chimed in on this ride, saying it all comes down to market demand.
The market will decide where value lies, he tweeted on January 31, so if nobody wants to invest in a Polkadot ETF, it might just won’t sell.
On the other hand, there are some risks to consider with Polkadot itself. The filing pointed out potential issues like an increase in DOT supply hitting the market and concerns about whether DOT could be classified as a security under federal laws.
Better chances after Gensler’s resignation?
The Web3 Foundation, which backs Polkadot, has been vocal about these security concerns. They argued back in February that they’ve worked hard to manage DOT distribution so that no single entity holds too much power over the network.
They even turned down offers from venture capitalists who were only interested in investing for profit.
This filing comes hot on the heels of Gary Gensler’s resignation as SEC chair on January 20, a shake-up that seems to have sparked a flurry of crypto ETF applications.
Just a day after he left, other asset managers jumped on board with their own ETF proposals for memecoins like Dogecoin and even some quirky ones like Official Trump and Bonk.
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