Market Response to 21Shares’ Polkadot ETF Filing
It seems that the trend of altcoin ETFs remains strong as we enter 2025. While the market eagerly anticipates the SEC’s rulings on applications for Solana, Litecoin, XRP, and Dogecoin, Polkadot has now thrown its hat into the ring.
On January 31st, 21Shares, a digital asset manager, submitted an S-1 form to the regulator for a potential Polkadot ETF, marking the first such application for the altcoin in the US.
Diverse Reactions to Polkadot ETF Proposal
Interestingly, the filing did not receive universal praise from the crypto community. In fact, some users humorously compared it to being “even worse than the XRP ETF.”
In response to the notably negative feedback from a segment of the X crypto community, Bloomberg ETF analyst James Seyffart commented,
“This is one of the most negatively received ETF filings I have seen on this platform. There seems to be a strong aversion to Polkadot… Ultimately, the market will determine the value of such a product. If there’s little interest in a Polkadot ETF, it may not succeed.”
While there was a brief uptick in social media chatter and positive sentiment surrounding DOT after the filing, the sentiment had shifted to a more negative tone by February 1st. This change could be attributed to the community’s negative reaction or Bitcoin’s sharp decline over the weekend.
It is worth noting that the filing was primarily driven by leveraged trading activity rather than genuine demand in the spot market that could fuel a sustainable price rally.
This was evident in the surge in Open Interest (OI) alongside stagnant CVD Spot levels (indicating subdued spot market demand).
If the lackluster spot market demand persists, DOT’s recent price recovery could be in jeopardy. The price chart over the past few days has shown DOT fluctuating between $4 and $11. Although the recent pullback stabilized above $5.5, it remained below key moving averages. Further deterioration in overall market sentiment could push DOT back towards $4.
Conversely, reclaiming the $7.5 price level could enhance the chances of a sustained recovery towards the $11-$12 range.