Grayscale Investments has filed an application with the U.S. Securities and Exchange Commission (SEC) to launch an exchange-traded fund (ETF) based on Polkadot’s DOT token.
Grayscale Investments has filed an application with the U.S. Securities and Exchange Commission (SEC) to launch an exchange-traded fund (ETF) based on Polkadot’s DOT token. The filing, submitted through Nasdaq, seeks approval to list and trade shares of the Grayscale Polkadot Trust. This is part of Grayscale’s broader push to expand its crypto ETF offerings, following similar filings for Cardano and XRP-based funds.
Nasdaq’s 19b-4 request triggers a 45-day review period, during which the SEC can approve, reject, or extend the evaluation. If approved, the ETF would function as a Commodity-Based Trust, holding DOT and tracking its value through an index price. The trust’s assets will gradually decrease as DOT is sold to cover expenses. Grayscale argues that this structure offers investors a cost-effective and accessible way to gain exposure to Polkadot without the complexities of directly handling cryptocurrency.
The SEC has recently signaled a more open stance on crypto financial products. Earlier this month, it acknowledged NYSE Arca’s proposal for an XRP Trust and outlined a regulatory framework for its potential approval. If given the green light, Grayscale’s XRP Trust will be managed by Coinbase Custody Trust Company, with BNY Mellon serving as the fund’s transfer agent.
Grayscale has also expanded its crypto investment offerings with the launch of a Dogecoin Trust, which allows institutional and accredited investors exposure to the $49.7 billion meme coin. The firm argues that Dogecoin has grown beyond its original joke status, now serving as a tool for financial inclusion. Meanwhile, the SEC recognized Grayscale’s application for a Cardano ETF earlier this month, marking another step in its ETF expansion strategy.
Polkadot’s price has recently declined, falling 6.5% in the last 24 hours to $4.42, reflecting a broader downturn in the crypto market. Asset manager 21Shares filed for a Polkadot ETF last month, making Grayscale the second firm seeking SEC approval for such a product.
The success of Bitcoin and Ethereum ETFs has encouraged further crypto ETF applications. Bitcoin-based funds have attracted over $40 billion in net inflows, with BlackRock’s Bitcoin Trust (IBIT) growing to approximately $55 billion in assets under management. Bloomberg analyst Eric Balchunas noted that issuers are capitalizing on the SEC’s evolving stance on crypto, estimating a 70% chance of Solana-based funds gaining approval and describing the Polkadot ETF’s prospects as “pretty good.”
Grayscale’s Polkadot Trust was formed in January 2021 but has not previously been offered as a standalone product. It will issue shares in exchange for DOT deposits, selling DOT to cover costs and potentially redeeming shares for DOT if regulators allow it. Unlike direct crypto purchases, the ETF aims to provide exposure to Polkadot while reducing security risks.
Balchunas described ETF issuers as “throwing spaghetti at the wall” to test the SEC’s willingness to approve new crypto products. While he did not assign specific odds to Grayscale’s Polkadot ETF, he suggested that SEC recognition increases its chances of eventual approval.
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