**Grayscale Proposes Polkadot ETF to SEC**
Grayscale has taken an exciting step by submitting a proposal to the U.S. Securities and Exchange Commission (SEC) for a Polkadot exchange-traded fund (ETF). This application, filed through Nasdaq, aims to gain approval for listing and trading shares of the Grayscale Polkadot Trust. The proposed ETF will operate as a Commodity-Based Trust, where shares will represent a proportional interest in the trust’s assets.
**Grayscale’s Proposal and Key Players**
According to the filing, the trust’s operations will be managed by Grayscale Operating and Grayscale Investments Sponsors, both of which are subsidiaries of Digital Currency Group. Coinbase Custody Trust Company will serve as the custodian for the trust, while CSC Delaware Trust Company will take on the role of trustee. It’s important to note that the trust, established in January 2021, will not actively manage its assets. Instead, it will hold DOT and track its value based on the index price. As the market price of its shares is expected to fluctuate with DOT’s market movements, the amount of DOT represented by each share will gradually decrease to cover the trust’s expenses.
**Function and Market Impact**
The trust will engage in various activities, including issuing shares in exchange for DOT deposits and selling DOT to manage operational costs. It may also redeem shares for DOT, pending regulatory approval. Rather than focusing on maximizing profits or minimizing losses, the trust aims to provide investors with direct exposure to Polkadot. Unlike purchasing cryptocurrencies directly, this ETF seeks to simplify the process of acquiring and holding DOT while reducing associated security risks. As of this report, Polkadot’s price is $4.43, reflecting a 6.17% decline over the past 24 hours and a 7.81% decrease over the last week. Therefore, the trust’s performance will closely mirror DOT’s market price, making it crucial for investors to keep an eye on Polkadot’s fluctuations.
**Grayscale Expansion to Other Crypto ETFs**
In addition to the Polkadot ETF, Grayscale is actively pursuing ETFs for a variety of digital assets. Recently, the SEC acknowledged a rule change application for a Grayscale Cardano ETF, which enhances its chances of approval. The New York Stock Exchange (NYSE) Arca filed for a Grayscale Cardano Trust conversion on February 10, and the SEC recognized this application on February 13. Furthermore, Grayscale is making strides with its XRP ETF application. Just last week, the SEC officially began reviewing the 19b-4 filing for this proposed ETF, with a decision deadline set for October 18, 2025. If approved, this fund will convert the Grayscale XRP Trust into a spot-based ETF, allowing for direct investment exposure to XRP. Beyond Polkadot, Cardano, and XRP, Grayscale is also looking to introduce ETFs for Solana (SOL), Dogecoin (DOGE), and Litecoin (LTC).
