21Shares Applies for First U.S. Spot Polkadot ETF, Fueling Altcoin ETF Hopes

21Shares, a leading issuer of cryptocurrency exchange-traded products (ETPs), is making a bold move in the U.S. market, filing for the first-ever spot Polkadot exchange-traded fund (ETF). This pioneering application, submitted on Friday, aims to offer investors direct exposure to DOT, the native token of the Polkadot network, through a traditional investment vehicle.

A Closer Look: The Proposed 21Shares Polkadot Trust

The proposed ETF, officially named the "21Shares Polkadot Trust," would trade on the Cboe BZX Exchange and track the performance of DOT. According to the filing, Coinbase Custody Trust Company, LLC will serve as the custodian for the fund's DOT holdings.

Following the Bitcoin and Ethereum ETF Wave: Is Polkadot Next?

This move by 21Shares comes on the heels of other firms seeking to expand the range of crypto investment products available in the U.S. Earlier this week, Tuttle Capital filed for 10 leveraged crypto ETFs, including one that would track Polkadot.

The U.S. Securities and Exchange Commission (SEC) has historically been cautious about approving cryptocurrency ETFs. While the agency approved spot Bitcoin ETFs in January 2024 and later greenlit spot Ethereum ETFs in May, it has yet to approve any funds based on other cryptocurrencies. The regulatory landscape, however, may be shifting, with some anticipating a more favorable environment for crypto under a new administration.

A Potential Milestone: What an Approved Polkadot ETF Could Mean

If approved, the 21Shares Polkadot Trust would mark a significant milestone, potentially opening the door for more altcoin ETFs in the U.S. market. The success of this application will likely depend on the SEC's assessment of Polkadot's market structure, liquidity, and susceptibility to manipulation, among other factors.