ONDO Gets Institutional Boost as 21Shares Files ETF Proposal

21Shares Eyes ONDO for Its Next Crypto ETF

Crypto asset manager 21Shares filed with the U.S. Securities and Exchange Commission (SEC) to launch an exchange-traded fund (ETF) backed directly by ONDO, the native token of Ondo Finance.

The filing, submitted under an S-1 registration on Tuesday, introduces the 21Shares Ondo Trust. If approved, the product would allow traditional investors to gain direct exposure to ONDO’s price performance without managing wallets, custody, or private keys.

This ETF will hold ONDO tokens directly, rather than using synthetic instruments or derivatives. It will track the CME CF Ondo Finance-Dollar Reference Rate, a benchmark managed by CF Benchmarks Ltd that aggregates ONDO trades from multiple leading crypto exchanges.

Ondo Finance: Tokenizing Wall Street

Founded in 2021 by Nathan Allman and Pinku Suran, both former Goldman Sachs professionals, Ondo Finance has quickly established itself as a leader in the RWA space. The platform specializes in issuing tokenized representations of traditional assets like U.S. Treasuries, allowing blockchain-based systems to integrate with conventional capital markets.

Recently, Ondo announced plans to acquire Oasis Pro, a U.S.-regulated broker-dealer, as part of its push to deepen its regulatory reach and streamline RWA issuance. The platform also entered into a strategic partnership with Pantera Capital, targeting a $250 million investment into tokenized assets.

Real world asset tokenization has emerged as one of the most promising sectors in blockchain. By representing physical or financial assets like bonds, real estate, or commodities as blockchain tokens, RWA platforms like Ondo aim to improve transparency, accessibility, and efficiency in global markets.

The proposed ONDO ETF by 21Shares aligns directly with these developments, offering another gateway for capital to flow into Ondo’s ecosystem.

How the 21Shares ONDO ETF Will Work

The ETF is designed as a passive investment vehicle that mirrors the price of ONDO without leverage or complex derivatives. Investors buying shares of the ETF will be exposed to the market performance of ONDO, while 21Shares manages the underlying holdings.

Coinbase Custody has been selected as the official custodian. All ONDO tokens owned by the Trust will be held in cold storage, segregated from corporate funds and inaccessible to online threats. This mirrors the custody model already in use by many institutional crypto products and enhances the ETF’s security posture.

The fund will not be registered under the Investment Company Act of 1940, meaning it will not come with the investor protections usually associated with mutual funds or traditional ETFs. The ONDO token is not registered as a security, which puts this product into a unique legal category that still lacks clear regulatory precedent.

The ETF could also provide secondary market liquidity to ONDO, potentially increasing its market cap, trading volume, and total value locked (TVL) within the Ondo ecosystem.

Regulatory Context and Market Timing

21Shares’ filing for the ONDO ETF arrives amid a wave of regulatory developments in Washington. In recent weeks, the U.S. House of Representatives passed several key bills aimed at bringing legal clarity to digital assets. This includes the Digital Asset Market Structure Clarity Act, which delineates regulatory oversight between the SEC and the Commodity Futures Trading Commission (CFTC).

While dozens of crypto ETF proposals remain in limbo, Bloomberg analysts have recently upped their approval odds for spot XRP, Dogecoin, and Cardano ETFs to 90% by year-end. That momentum could create favorable conditions for the ONDO ETF, particularly as U.S. regulators seek frameworks that support innovation without sacrificing consumer protection.

However, the ONDO ETF is not yet approved. The SEC’s review process is ongoing, and the registration statement is not effective. Until the green light is given, the ETF cannot be marketed or sold to U.S. investors.