ARK Invest Applies for a Spot Ethereum ETF: Is the Ethereum ETF Race Beginning?

• This new fund aims to expand its portfolio of crypto products, coming right after the SEC began considering Bitcoin ETFs and Ether futures.
• Regulators in countries like Canada have been becoming more crypto-friendly. Canada was the first country to approve a spot Ether ETF in April 2021 and later gave the green light to spot Bitcoin ETFs a few months later.
• The DC Circuit Court of Appeals criticized the SEC’s approach of allowing Bitcoin futures but not converting Grayscale’s Bitcoin Trust into an ETF as “arbitrary and capricious.”

ARK Invest has moved to launch a spot Ethereum ETF in collaboration with 21Shares; Are you preparing for the aftermath of Bitcoin?

ARK Invest Makes a Move for a Spot Ethereum ETF

ARK Invest, in collaboration with 21Shares, has applied for a spot Ethereum ETF in the United States. Furthermore, this new fund aims to expand its portfolio of crypto products, coming right after the SEC began considering Bitcoin ETFs and Ether futures. Therefore, if approved, the proposed ETF would set a new example in the crypto market by trading on the Cboe BZX Exchange, marking a significant milestone.

Unlike the numerous Ether futures ETFs applied for in July and August, this initiative by ARK Invest and 21Shares plans to directly hold Ether. Currently, Ether has a market capitalization of approximately $195 billion, which is significantly less than Bitcoin’s $500 billion market capitalization. If approved, the fund will trade on the Cboe BZX Exchange. However, the application did not disclose details such as the ETF’s trading code or fee structure.

Additionally, regulators in countries like Canada have been becoming more crypto-friendly. Canada was the first country to approve a spot Ether ETF in April 2021 and later gave the green light to spot Bitcoin ETFs a few months later. Therefore, ARK Invest’s application for a 21Shares Ethereum ETF not only finds a place in the United States but within a broader international trend of crypto acceptance.

In addition to the recent Ether futures proposals, ARK Invest, managed by asset manager Cathie Wood, collaborated with Switzerland-based ETP issuer 21Shares to launch a spot Bitcoin ETF in 2021. The SEC rejected these efforts, but both companies reapplied for a spot Bitcoin product in April of this year. They are also listed as sub-advisors for two proposed crypto funds involving Ether futures contracts and three proposed crypto funds involving Bitcoin futures contracts.

SEC’s Changing Stance

The recent proposal for an ARK Invest and 21Shares Ether ETF marks a significant moment for crypto investment options. It appears to be coming at a time when the SEC is softening its stance, especially after losing a lawsuit against Grayscale Investments last month. The DC Circuit Court of Appeals criticized the SEC’s approach of allowing Bitcoin futures but not converting Grayscale’s Bitcoin Trust into an ETF as “arbitrary and capricious.” As a result, industry analysts have increased the likelihood of a spot Bitcoin ETF being approved in the United States by the end of this year to 75%.

Furthermore, it seems to coincide with other jurisdictions, like Canada, that have already approved similar crypto products. Canada launched a spot Ether ETF in April 2021 and gave the green light to spot Bitcoin ETFs just a few months later. This trend shows that regulatory bodies outside of the United States are already warming up to these types of crypto assets.