In collaboration with 21Shares, ARK Invest has become the first to file for a spot ether ETF in the U.S. Moreover, this new fund aims to expand its portfolio of crypto products, coming hot on the heels of the SEC’s considerations for spotting Bitcoin ETFs and Ether futures. Consequently, if approved, the proposed ETF would trade on the Cboe BZX Exchange, setting a new precedent in the crypto market.
Ether Futures vs. Spot Ether
Unlike the numerous Ether futures ETFs filed for in July and August, this endeavor by ARK Invest and 21Shares plans to hold Ether directly. Currently, Ether boasts a market capitalization of approximately $195 billion, trailing only behind Bitcoin’s $500 billion cap.
If approved, the fund will trade on the Cboe BZX Exchange. However, the filing did not disclose details like the ticker or fee structure of the planned ETF.
Additionally, regulators in countries like Canada have been increasingly crypto-friendly. Canada became the first country to approve a spot Ether ETF in April 2021, only a few months after green-lighting spot Bitcoin ETFs. Hence, the ARK 21Shares Ethereum ETF filing is not merely a U.S. phenomenon but fits into a broader international trend toward crypto acceptance.
Although the SEC rejected those efforts, both companies re-filed for a spot Bitcoin product this April. They have also shared plans for two funds involving Ether futures contracts and are listed as sub-advisers on three proposed crypto funds involving Bitcoin futures contracts.
The recent ARK Invest and 21Shares bid for a spot in Ether ETF signals a landmark moment for cryptocurrency investment options. As the SEC’s stance appears to be softening, the timing for introducing such groundbreaking products has never been more apt.
The SEC’s Shifting Stance
Significantly, this development comes when the SEC appears to be on the back foot, particularly after losing a court case to Grayscale Investments last month. The DC Circuit Court of Appeals judged the SEC’s approach in allowing Bitcoin futures but not converting Grayscale’s Bitcoin Trust to an ETF as “arbitrary and capricious.”
Hence, industry analysts have increased the likelihood of a U.S. spot Bitcoin ETF approval by the end of this year to 75%.
Additionally, the timing seems especially apt as other jurisdictions like Canada have already approved similar crypto products. Canada launched its spot Ether ETF in April 2021, just a couple of months after giving the green light to spot Bitcoin ETFs. This trend shows that regulatory bodies outside the U.S. are already warming up to such crypto assets.
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