April 19, 2024
Cathie Wood's Ark Invest Seeks to Launch First Ethereum ETF in the US
Latest Cryptocurrency News

Cathie Wood’s Ark Invest Seeks to Launch First Ethereum ETF in the US

Based on a filing with the Securities and Exchange Commission, Cathie Wood’s Ark Invest took steps on Wednesday to launch the first spot Ethereum ETF in the United States.

The application, known as the ARK 21Shares Ethereum ETF, is similar to those for spot Bitcoin ETFs that the SEC recently postponed. Following Grayscale’s recent trial triumph, the regulator declared this week that it requires additional time to make a decision on a number of issues.

In its application, Ark Invest designated Coinbase as a custodian, designating the cryptocurrency exchange to store the Ethereum used to support the ETF shares. On the Cboe BZX Exchange, the ETF itself will be traded.

Several applications for futures-based Ethereum ETFs have been submitted to the SEC, but Ark Invest’s proposal appears to go a step further, especially in light of the fact that futures-based Bitcoin ETFs have been trading in the United States since ProShares began trading on the New York Stock Exchange in 2021.

Two years later, it would make sense for Ethereum to make its Wall Street debut through futures-based ETFs. A flurry of Ethereum futures ETFs that monitor the value of derivatives exchanged on the Chicago Mercantile Exchange (CME) may receive SEC approval as early as October, according to growing speculation.

Ark Invest’s request for a spot Bitcoin ETF was also delayed by the regulator, weeks before the SEC’s latest round of Bitcoin-related delays. In June 2021, ARK Invest initially submitted a filing for a spot Bitcoin ETF.

According to Eric Baclhunas, senior ETF analyst at Bloomberg, the SEC has instructed applicants for futures-based Ethereum ETFs to withdraw their applications about a week after they are submitted. However, they have remained on the SEC’s desk this time.

In a Tweet on Wednesday, Baclhunas predicted that more businesses will likely swiftly follow Ark Invest’s lead. If they aren’t already about to be submitted, he predicted that there will be additional applications.

While the U.S. Court of Appeals for the D.C. Circuit previously ruled with Grayscale, it alleged that the SEC’s prior denial of Grayscale’s request to transform its Grayscale Bitcoin Trust (GBTC) into a spot ETF was “capricious.”

In its ruling, the court stated that market rigging concerns—which the SEC has regularly raised in rejecting applications since 2013—were incoherent given that the SEC has previously approved futures-based Bitcoin ETFs.

In its application submitted on Wednesday, Ark Invest suggests that the SEC’s earlier worries should be allayed by the Cboe BZX Exchange’s ability to learn of activities in the CME’s Ethereum futures market.

Image: Freepik

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