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Grayscale has submitted a proposal to the U.S. Securities and Exchange Commission (SEC) to launch an Exchange-Traded Fund (ETF) focused on Polkadot (DOT). Filed through Nasdaq, the application aims to list and trade shares of the Polkadot Trust, a commodity-based trust where shares represent proportional interests in the trust’s assets.
Key Details of the Proposal
The trust’s operations will be managed by two subsidiaries of Digital Currency Group (DCG): Grayscale Operations and Grayscale Investments, which will sponsor the trust. Coinbase Custody Trust Company is designated as the custodian, and CSC Delaware Trust Company will serve as the trustee. Established in January 2021, the trust will not actively manage assets but will track Polkadot’s value through an index price. As Polkadot’s market value fluctuates, the trust’s share price is expected to vary accordingly. Over time, the number of Polkadot represented per share will decrease due to the trust’s expenses.
Functionality and Market Impact
The trust’s activities will include issuing shares in exchange for Polkadot deposits and selling Polkadot to cover operating costs. It may also redeem shares for Polkadot, pending regulatory approval. The trust does not aim to maximize profits or minimize losses but provides investors with direct exposure to Polkadot. Unlike directly purchasing cryptocurrency, the ETF is designed to simplify the acquisition and holding of Polkadot while minimizing associated security risks.
Grayscale’s Expansion into Other Crypto ETFs
Grayscale is also pursuing ETFs for multiple digital assets. Recently, the SEC acknowledged Grayscale’s rule change application for a Cardano ETF, increasing the likelihood of its approval. The New York Stock Exchange (NYSE) ARCA filed a Cardano Trust Conversion application on February 10, and the SEC identified the application on February 13. Additionally, Grayscale is advancing its XRP ETF application. Last week, the SEC officially began reviewing the proposed ETF’s 19b-4 filing, setting the decision deadline for October 18, 2025. Beyond Polkadot, Cardano, and XRP, Grayscale aims to introduce ETFs for Solana (SOL), Dogecoin (DOGE), and Litecoin (LTC).
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