In a recent development, asset management firms ARK Invest and 21Shares have submitted a formal request for regulatory approval of an exchange-traded fund (ETF) aimed at directly holding ether (ETH). This move was disclosed in a filing made to the US Securities and Exchange Commission (SEC) on Wednesday.
The proposed ETF, named the Ark 21Shares Ethereum ETF, marks a pioneering effort in the United States to introduce a fund that directly channels investments into ETH, the second-largest cryptocurrency by market capitalization. The assets held within this ETF would be under the safekeeping of the Coinbase Custody Trust Company.
Initially, this announcement triggered an upswing in the prices of both Ether and Bitcoin. However, this bullish rally was short-lived, and both cryptocurrencies subsequently reverted to levels observed before the filing.
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This development comes on the heels of a wave of applications seeking SEC approval for highly sought-after spot Bitcoin ETFs, including a joint endeavour by ARK Invest and 21Shares. Last week, the SEC decided to postpone decisions on all these applications.
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Furthermore, anticipation is building around the forthcoming SEC decision regarding the first futures-based Ether ETF, with an announcement expected by mid-October at the latest. Market observers predict that the industry will advocate for more cryptocurrency ETFs, buoyed by the recent legal victory of trust issuer Grayscale against the SEC.
According to a report by brokerage firm Bernstein, a spot ETH ETF is poised to be a prominent contender, given its structural similarity to Bitcoin, complete with actively traded futures and spot markets hosted on the Chicago Mercantile Exchange (CME), a significant regulated platform for institutional investors.
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