21Shares, a Switzerland-based investment product provider, is launching the world’s first exchange traded product (ETP) for the cryptocurency Polkadot (DOT). The Polkadot ETP (PDOT) will list on the Swiss SIX Exchange on Thursday.
21Shares AG, an issuer of crypto Exchange Traded Products (ETPs) is launching the world’s first Polkadot ETP (ADOT SW – CH0593331561 – PDOT) “DOT ETP” on the regulated segment of the Swiss stock exchange (SIX Exchange) on Thursday February 4th, 2021. Last Friday, Polkadot was admitted by the Index Provider to the 21Shares HODL basket ETP as second-largest constituent after Bitcoin (BCH being removed) and as such, makes it is the perfect timing to add an additional single asset ETP to the already wide range of crypto ETPs 21Shares offers.
“The new DOT ETP offers investors a safe, regulated and simple exposure to the exciting new blockchain technology. In terms of providing liquidity, we benefit from proven, trusted partners.” – Hany Rashwan, CEO of 21Shares AG.
Interoperability project Polkadot
Polkadot serves as a blockchain of blockchains, allowing otherwise independent blockchains to communicate with each other, share security features, and transfer assets freely amongst themselves. The DOT token is the native token of the Polkadot network. It serves a couple of vital roles in the system: It is designed to participate in governance decisions, including tabling proposals and voting. In addition, it is used as an electronic payment system. With its market capitalization currently standing at over $16.8 billion, the DOT token now surpasses that of XRP by over $4 billion and has attained the status of the third-largest cryptocurrency.
Though the popularity of the DOT token has increased substantially over the past months, it is still not easy for non-technical users to buy and hold and interact with it. The DOT ETP lowers the barriers to entry for newcomers to the crypto asset industry and allows a much wider audience to be able to participate in its development.
Strong demand for crypto products
The launch comes in light of the recent surge in interest for this asset class. 21Shares AG has seen a 5-fold increase in demand across its suite of crypto ETPs since Q3 2020. This is based on the amount of new inflows into the ETPs. That demand came mainly from institutional investors who have preferred an institutional-grade ETP versus other structures currently available on the market.
“After investors purchase their first Bitcoins through our ETPs, there is a natural transition to invest in other crypto assets. We have consistently delivered a range of products over the last two years demonstrating our stronghold in the D-A-CH region. […] In the next 3 months, we aim to add 2 to 3 more innovative ETPs as well as new European exchange listings.” – Hany Rashwan, CEO 21Shares AG.
The DOT ETP will allow clients to invest, diversify through its various ETPs, and gain exposure to the multi-chain application environment that enables cross-chain interoperability on a level previously not possible via their traditional broker or bank. The ETP structure means that the product benefits from 100% physical collateralization. Each share is fully collateralized by the corresponding amount of physical DOT tokens. In addition, on exchange liquidity provision is assured by the existing ETP market markets. This allows even more conservative institutions to safely hold this asset class via an Exchange Traded Product.