Captain Cathie Wood's ARK Invest Files for Marvelous First Spot Ether ETF

Cathie Wood's ARK Invest Files for First Spot Ether ETF

Disclaimer: This blog is just for educational and informative purposes and should not be considered an investment or trading advise

Key Takeaways:

  • Ark Invest and 21Shares seek SEC approval for a groundbreaking Ethereum ETF, directly holding ETH.
  • The ETF plans to use Coinbase Custody Trust Company for asset custody, marking a significant step for crypto adoption.
  • While the crypto industry anticipates further ETF developments, a spot ETH ETF could become a top contender, thanks to market similarities with BTC and CME's involvement.

Ark Invest and 21Shares have submitted a regulatory request for an Exchange-Traded Fund (ETF) that will directly hold ether (ETH), as revealed in a filing with the U.S. Securities and Exchange Commission (SEC). If approved, the Ark 21Shares Ethereum ETF would be the first U.S. ETF to invest directly in ETH, the second-largest cryptocurrency by market capitalization.

This innovative ETF intends to safeguard assets through the Coinbase Custody Trust Company. The initial announcement led to brief price surges in both ether and bitcoin; however, they retraced to pre-filing levels.

This move follows numerous applications for a coveted spot in Bitcoin ETF, including a collaborative effort by Ark and 21Shares. The SEC recently postponed decisions on these applications. Concurrently, the SEC is anticipated to approve the first futures-based ether ETF by mid-October.

The crypto industry including BlackRock, buoyed by Grayscale's legal victory over the SEC, is poised to advocate for more crypto ETFs, with a spot Ethereum ETF emerging as a strong contender due to its market resemblance to BTC. Both have actively traded futures and spot markets on the regulated Chicago Mercantile Exchange (CME), appealing to institutional investors.

At the time of writing Ethereum was trading just above $1,600.

Ethereum Price
Ethereum Price

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What is the significance of the Ark 21Shares Ethereum ETF filing with the SEC?

The Ark 21Shares Ethereum ETF filing with the SEC is significant because it represents the first attempt to create a U.S. ETF directly investing in ETH, the second-largest cryptocurrency.

How does the ETF plan to safeguard its assets, and what impact did the filing have on crypto prices?

The ETF plans to custody its assets with Coinbase Custody Trust Company, and the initial announcement briefly boosted crypto prices before they returned to pre-filing levels.

What key factors drive interest in a spot Ethereum ETF, and how does it compare to the BTC market structure?

Interest in a spot Ethereum ETF is driven by its similarities with the BTC market structure, including actively traded futures and spot markets on the regulated Chicago Mercantile Exchange (CME), making it attractive to institutional investors.