Grayscale Seeks SEC Approval for Polkadot ETF Amid Rising Crypto ETF Filings

Highlights:

• Grayscale filed a Polkadot ETF proposal with the SEC through Nasdaq, aiming to track DOT’s price.
• 21Shares filed the first Polkadot ETF application in January, increasing competition in crypto ETFs.
• The SEC’s decision on the Polkadot ETF could influence the approval of similar crypto-based funds.

Grayscale has officially sought approval to list a Polkadot ETF from the U.S. Securities and Exchange Commission (SEC) via the Nasdaq stock exchange. The application was filed on February 25, which aims at the listing and trading of the shares of the Grayscale Polkadot Trust under the Nasdaq rule 5711(d). The filing comes at the heels of the increased proposal to list ETFs linked to cryptocurrencies following the SEC’s approval of spot Bitcoin and Ethereum ETFs last year.

The proposed Polkadot ETF will be in the form of a Commodity-Based Trust. Stocks will be the proportional interest in the trust with reference exclusively to Polkadot’s native token, DOT. The ETF will be used for real-time tracking of the price of DOT and to get exposure to the asset without having to invest in the token directly.

The move puts Grayscale as the second firm to seek approval for a Polkadot ETF this year. Swiss-based asset manager 21Shares first applied for the license in January this year. The competition proves the growing activity of managers in developing crypto solutions for rising market demand.

Grayscale just filed for a Polkadot ETF pic.twitter.com/bo2UVjAW2U

— Eric Balchunas (@EricBalchunas) February 25, 2025

Structure of the Proposed Polkadot ETF

Grayscale Operating LLC and Grayscale Investments Sponsors LLC, which are the subsidiaries of Digital Currency Group, sponsor the trust. As per the filing, Coinbase Custody Trust Company is selected as the digital asset custodian to manage the trust’s DOT. CSC Delaware Trust Company will act as the trustee, while administration will be done by BNY Mellon Asset Servicing. Furthermore, Foreside Fund Services will be the fund’s distributor, while CoinDesk Indices will offer the price index for the fund.

The trust established in January 2021 will not operate as an investment manager. Instead, it will hold DOT and vary its shares in proportion to the fluctuations in the price of the tokens. Further, the quantity of DOT per share may reduce over time due to the spending of the trust’s expenses. This structure seeks to offer direct market access without the need to trade in the crypto assets individually.

The ETF will offer shares for deposits made in DOT and may use the DOT to meet various expenses. It can also buy back shares for DOT if regulators permit such transactions. This operational model aims to maintain transparency and align the share value to the performance of the underlying assets.

Rising Competition in the Crypto ETF Market

The filing of the Polkadot ETF is part of Grayscale’s strategy to diversify its products in the crypto industry. Recently, the company filed for Cardano and XRP ETFs. The SEC recognized Grayscale’s Cardano ETF application earlier this month and has now put it under consideration. Likewise, the SEC has initiated a review of the 19b-4 filing for the conversion of Grayscale XRP Trust, with a decision date of October 18, 2025.

JUST IN: SEC ACKNOWLEDGES FILING GRAYSCALE'S SPOT $ADA (CARDANO) ETF

Source: @WatcherGuru pic.twitter.com/yazoUY7pWs

— Mario Nawfal’s Roundtable (@RoundtableSpace) February 24, 2025

Other asset managers are also seeking approvals for ETFs. Canary Capital filed an XRP ETF, and Tuttle Capital suggested a 2x leveraged Polkadot ETF among the other ten crypto ETFs. This increased interest has been due to the desire to deliver diversified digital asset products to both institutional and retail investors.