ARK Investment Management and VanEck have submitted applications to the U.S. Securities and Exchange Commission (SEC) for the establishment of the first Ether Spot Exchange Traded Fund (ETF) in the United States. This move, spearheaded by renowned investor Cathie Wood, could provide investors with an easy and regulated way to gain exposure to the growing cryptocurrency market. With the increasing mainstream acceptance of Ethereum’s native token, Ether, the launch of an Ether Spot ETF could open doors for investors looking to diversify their portfolios and capitalize on the potential growth of the digital asset.
Cathie Wood’s asset management firm, ARK Invest, has recently made a significant move in the cryptocurrency market. After its Bitcoin ETF application was put on hold by regulators, the company has now filed for the United States’ first Ether (ETH) spot ETF. This development highlights the growing demand for cryptocurrency investment products.
The filing made by ARK Invest for the Ethereum ETF, known as ARK21Shares Ethereum ETF, is outlined in an S-1 document submitted to the Securities and Exchange Commission (SEC). The ETF aims to track the performance of Ether by holding ETH to back the value of its shares. If approved, the custodian of the Trust would be Coinbase Custody, a well-established firm serving other major fund providers like Grayscale and BlackRock.
It’s worth noting that this filing comes in the wake of fellow investment manager VanEck submitting a similar application. Both filings have initiated the regulatory process, and the SEC will now review and determine whether to approve or deny each submission.
While the news of ARK Invest’s filing caused a brief price increase for Bitcoin and Ether, the assets quickly returned to their pre-announcement values. The filing itself states that shareholders in the Trust will not receive the same protections as investors in ether futures contracts on regulated futures markets. This reflects the SEC’s historical preference for futures ETFs rather than spot ETFs, primarily due to the perceived investor protections provided by the CME futures market.
As for the timeframe for approval, Bloomberg ETF analyst James Seyffart estimates that the SEC will make a final decision on both ARK Invest and VanEck’s filings by May 23, 2024. This aligns with the projected deadline for multiple Bitcoin spot ETF applicants as well. The SEC’s response to Grayscale’s spot Bitcoin ETF bid, in particular, may influence the approval of Ether ETFs. Grayscale, a leading cryptocurrency asset management firm, has argued that the SEC should approve spot ETFs to benefit investors, especially after losing to the company in court.
The filing of the Ether ETF by ARK Invest showcases the continued interest and demand for cryptocurrency investment opportunities. With the potential approval of both the Bitcoin and Ether ETFs, investors will have more accessible and regulated avenues to participate in the growing digital asset market.
Sources: Cryptopotato, SEC