Investment manager VanEck and ARK 21Shares have made a landmark move by filing for the first-ever Ether (ETH) spot Exchange-Traded Fund (ETF) in the United States. The recent filings with the U.S Securities and Exchange Commission (SEC) disclose that ARK21Shares Ethereum ETF will directly hold the second-largest cryptocurrency to track its performance, thereby supporting the value of its shares. Meanwhile, Chicago Board Options Exchange’s (CBOE) BZX exchange is also seeking regulatory approval for offerings connected with Ark 21Shares and VanEck, marking an attempt to launch the country’s first spot ether exchange-traded funds.
Interestingly, the custodian for both trusts would be Coinbase Custody, a known figure in the space also serving other major fund providers like Grayscale and BlackRock. ARK Invest has mooted a surveillance sharing agreement with Coinbase, a notion earlier discussed in their Bitcoin spot ETF application.
Unquestionably, the news impacted the cryptocurrency market, if only momentarily. Both Bitcoin (BTC) and Ethereum (ETH) prices surged, with BTC peaking at $25,900 and ETH hitting $1,655. Both returned to pre-announcement values shortly thereafter. However, it brings to mind SEC’s previous inclination towards futures-based ETFs for Bitcoin, due to investor protections they believe spot markets can’t meet.
In fact, this predisposition has led to ongoing resistance to a Bitcoin spot ETF, indicating the SEC’s reluctance to approve any Ether ETF at present. Reasons include Ethereum’s higher price volatility and regulatory ambiguities in contrast to market leader Bitcoin. Awaiting developments in the ETF sphere, the crypto industry monitors the situation keenly.
Surprisingly, recent turn of events involving a court ruling favoring Grayscale has spurred fund managers to submit aplenty applications for both Bitcoin spot ETFs and Ether futures ETFs. Bloomberg ETF analyst James Seyffart has predicted that the SEC’s ultimate decision on Ark Invest and VanEck’s ETF applications will likely come by May 23, 2024. The results of these ETF applications could greatly depend on SEC’s reaction to Grayscale’s spot Bitcoin ETF application.
Of particular significance is a recent court defeat, which has led Grayscale to suggest that futures-based Bitcoin ETFs have no remaining advantages over spot ETFs and underline the potential benefits for investors. In an interview with CryptoNews, Felix Shipkevich, founder and principle of Shipkevich PLLC, expressed that SEC is likely to greenlight a spot Bitcoin ETF after this court ruling. Therefore, despite some scepticism, the crypto industry remains hopeful regarding the SEC’s ultimate stance.
Source: Cryptonews
