21Shares Pursues SEC Approval for First Spot Sei ETF

Swiss crypto asset manager 21Shares has filed with the SEC to launch the first spot SEI ETF. This move is part of the growing U.S. market for crypto investment products. If approved, the ETF would let investors access SEI, the native token of the Sei Network, through a regulated channel.

The Growing Appeal of Sei Network

SEI has gained attention for its blockchain built for decentralized exchanges and fast trading. Since its launch in August 2023, the network lets token holders vote on decisions and pay transaction fees, giving it practical use as well as investment value.

The ETF from 21Shares would let investors hold SEI directly, unlike derivative products that track prices indirectly. This makes it attractive to both retail and institutional investors who want easy access to the Sei ecosystem. Its passive design shows a focus on long-term investment rather than short-term trading.

The SEC has usually been cautious about approving spot crypto ETFs beyond Bitcoin and Ethereum. This makes 21Shares’ proposal especially notable and could affect other funds considering Sei or similar layer-1 tokens.

Competition in the Altcoin ETF Space

At the same time, the competition to launch a Sei ETF is increasing. In April, Canary Capital, a U.S. digital asset firm, submitted a similar application, showing growing interest in SEI from institutions. Their proposal highlights staked SEI, which could provide passive income and make it different from the 21Shares fund if staking is included later.

Beyond SEI, firms like VanEck and Franklin Templeton have considered spot ETFs for top altcoins, including SOL, XRP, and ADA. For 21Shares, the Sei ETF adds to its successful Bitcoin and Ethereum offerings and a recent U.S. filing for a spot Solana ETF. Experts seethis as part of a wider trend of institutions seeking regulated ways to invest in new crypto ecosystems.

Regulatory Considerations and Staking Potential

The 21Shares filing also allows for the possibility of staking the ETF’s SEI holdings to earn additional returns. The company emphasized, however, that any staking would depend on regulatory approval, reflecting caution given the SEC’s conservative approach. If implemented, this could make 21Shares one of the first issuers to offer staking yield within a U.S.-listed altcoin ETF.

Institutional interest in SEI is rising because of its low fees and fast transactions, making it attractive for decentralized finance. The ETF acts as both a financial tool and a measure of the Sei blockchain’s adoption. Early investors may benefit from its practical applications and possible price gains.

What To Expect Now?

Approval of the 21Shares SEI ETF is not certain, and the SEC has not given a timeline. Investors should expect a review period and possible delays as the agency looks at the rules for spot altcoin ETFs beyond Bitcoin and Ethereum. The filing shows growing interest in Sei and demand for regulated access to new layer-1 tokens.

If approved, the ETF would offer a regulated and simple way to invest in SEI, attracting both retail and institutional investors. It could also set an example for future altcoin ETFs, including those with staking features.