21Shares files for a spot Bitcoin Exchange-Traded Fund (ETF), causing an increase in SEI price.

The Swiss asset management company, 21Shares, has filed an application with the United States Securities and Exchange Commission (SEC) for a spot Exchange Traded Fund (ETF) focused on Stellar Lumens (SEI). The proposed ETF, if approved, will be named the 21Shares SEI ETF and is designed to track the CF SEI-Dollar Reference Rate.

The 21Shares SEI ETF is a passive fund, offering investors an opportunity to gain exposure to SEI without the need for active management. The ETF may also include optional staking rewards, contingent on the sponsor determining that there are no legal or tax risks. This feature, if implemented, could potentially attract more investors seeking passive income opportunities.

The SEC's decision on staking features in altcoin ETFs is a subject of anticipation, with a final ruling expected by October 2025. Historically, the SEC has shown a cautious approach towards staking features in ETFs, as evidenced by its delayed decisions on similar features in Grayscale's spot ETFs.

At the time of filing, SEI was trading near $0.30, with a market capitalization of around $1.82 billion and a 24-hour trading volume exceeding $210 million. The total value locked (TVL) for SEI surged to $611 million in June, demonstrating strong performance in the DeFi market.

In June, SEI dominated DeFi activity, registering a 368% growth in fee revenue. This growth is attributed to the support from previous DeFi activity and the strong TVL performance. Analyst Ali Martinez predicts that SEI price could rally to $0.345 in the short term, while some analysts believe SEI could jump to its 2024 high of $0.70 and further to $1, if a strong bullish sentiment persists.

Coinbase Custody will serve as the fund's custodian, ensuring secure storage of the SEI assets. The creation/redemption process can be completed in cash or in-kind, offering flexibility to investors. It's important to note that the ETF does not employ leverage or derivatives, further reducing the investment risk.

The SEC's scrutiny of staking features in altcoin ETFs is indicative of the strict regulatory oversight in the crypto space. This oversight is designed to protect investors and ensure the integrity of the market. As we await the SEC's decision, the 21Shares SEI ETF presents an exciting opportunity for passive investment in the DeFi market.

21Shares files for a spot Bitcoin Exchange-Traded Fund (ETF), causing an increase in SEI price.