ARK Invest and 21Shares Seek SEC Approval for Groundbreaking Ether ETF

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ARK Invest and 21Shares could bring forth the next generation of crypto-based ETFs.

Introduction

In a significant development, ARK Invest and 21Shares have made a bold move by for an exchange-traded fund (ETF) that would directly hold ether (ETH), the second-largest cryptocurrency by market value. This pioneering ETF, named the ARK 21Shares Ethereum ETF, aims to become the first of its kind in the United States, offering investors a direct path to Ethereum. Let’s break down the key details of this groundbreaking initiative.

The Ark 21Shares Ethereum ETF is the first attempt to list such a fund in the U.S. that directly invests in , the second largest cryptocurrency by market capitalization. reports

— CoinDesk (@CoinDesk)

A Historic First: ARK 21Shares Ethereum ETF

The ARK 21Shares Ethereum ETF sets a historic precedent as the first-ever attempt to list a US-based fund that directly invests in ETH, providing investors with a straightforward gateway into the world of Ethereum.
To ensure the safety of investors’ assets, the ETF plans to entrust the custody of its holdings to Coinbase Custody Trust Company, a well-established name in the cryptocurrency custody realm.

Initial Excitement and Market Impact

News of this innovative ETF initially sent both ether and bitcoin prices soaring, sparking excitement in the crypto space. However, this upward momentum was short-lived, and both cryptocurrencies quickly reverted to their pre-announcement levels.

Pioneering the Way for Cryptocurrency ETFs

The application for the ARK 21Shares Ethereum ETF comes on the heels of a flurry of requests for a coveted spot bitcoin ETF, including a collaborative effort between ARK and 21Shares. However, the SEC recently decided to delay decisions on all these applications, highlighting the regulatory complexities surrounding cryptocurrency ETFs.

Key Details of the ETF Application

The application for the ARK 21Shares Ethereum ETF officially kicked off on September 6 when it was submitted. This marked the beginning of an exciting journey for this groundbreaking initiative.

This pioneering ETF will go by the name of the “ARK 21Shares Ethereum ETF,” signifying its unique focus on Ethereum.
Investors can anticipate its listing and trading on the Cboe BZX Exchange, with pricing transparency ensured through the use of the CME CF Ether-Dollar Reference Rate – New York Variant.

The success of this ETF venture relies on critical players within the financial sector. 21Shares plays a pivotal role as the trust sponsor, while the Delaware Trust Company assumes the crucial position of trustee. Ensuring the security of the ETF’s assets, Coinbase Custody Trust Company acts as the custodian. Additionally, ARK Investment Management will function as the sub-adviser, overseeing the promotion and marketing of the ETF shares. These key players are central to the ETF’s potential success.

Simplified Ether Investment

The primary objective of this ETF is to provide investors with a cost-effective and straightforward means of investing in ether, eliminating the complexities of directly purchasing, holding, or trading the cryptocurrency.

SEC Approval Pending

While this ETF holds immense promise, it is crucial to note that formal approval from the SEC is still pending. The SEC has yet to give the green light to any spot cryptocurrency ETFs, including a previous batch of filings for spot bitcoin funds. As regulatory dynamics evolve, the fate of the ARK 21Shares Ethereum ETF will be closely monitored by both crypto enthusiasts and traditional investors seeking exposure to digital assets.

JUST IN: Cathie Wood’s Ark Invest, along with 21Shares, have just filed for a Spot Ethereum ETF.

— WhaleWire (@WhaleWire)

In-Kind Transactions and Trading Dynamics

The ETF operates primarily through “in-kind” transactions involving blocks of 5,000 Shares, aligned with the quantity of ether per Share of the Trust. Authorized Participants, financial firms authorized to purchase and redeem Shares, will facilitate the exchange of ether for Shares, allowing trading on the secondary market.

Conclusion

ARK Invest and 21Shares are taking a pioneering step in the cryptocurrency investment landscape by seeking regulatory approval for the ARK 21Shares Ethereum ETF. While the formal approval from the SEC remains pending, this initiative represents a significant milestone in making cryptocurrency investment accessible to a broader audience, bridging the gap between traditional finance and the digital asset realm.