The US Securities and Exchange Commission (SEC) has recently announced a delay in its decision regarding the approval of a proposed exchange-traded fund (ETF) that would hold Polkadot’s native token, according to regulatory filings. The deadline for a final ruling has been extended until June 11, almost four months after the Nasdaq requested permission to list the Grayscale Polkadot Trust on February 24.
This delay adds to a growing list of approximately 70 proposed ETFs awaiting SEC approval, which includes funds holding various altcoins, memecoins, and crypto-related financial derivatives, as reported by Bloomberg Intelligence. Asset managers are actively pitching ETFs for a wide range of cryptocurrencies, from well-known ones like XRP, Litecoin, and Solana to more niche tokens such as Penguins, Dogecoin, and 2x Melania, highlighting the diverse interests within the cryptocurrency market.
Polkadot, a layer-1 blockchain network that was launched in 2020, has gained significant traction in the crypto space. Its native token, DOT, currently holds a market capitalization of around $6.6 billion as of April 24, according to data from CoinMarketCap.
Grayscale, a prominent asset manager in the cryptocurrency space, is one of several companies seeking regulatory approval to list altcoin ETFs in the US. In addition to its existing crypto funds, which include ETFs for Bitcoin and Ether, Grayscale has expressed interest in launching ETFs for tokens like Solana, Litecoin, XRP, Dogecoin, and Cardano.
The push for altcoin ETFs comes amidst a growing interest in cryptocurrencies from institutional investors. A report by Coinbase and EY-Parthenon in March revealed that over 80% of institutional investors are planning to increase their allocations to crypto by 2025. However, analysts caution that the demand for altcoin ETFs may not be as strong as it is for more established cryptocurrencies like Bitcoin and Ether.
Eric Balchunas of Bloomberg compared getting a coin ETF approved to having a song added to popular music streaming services, noting that while it doesn't guarantee success, it does increase visibility where most listeners are.
The cryptocurrency market continues to evolve, with the potential for more diverse investment opportunities through the introduction of ETFs for a range of digital assets. As regulatory bodies like the SEC navigate this new landscape, the decision on the Polkadot ETF could set a precedent for future listings of altcoin funds in the US market.
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