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ARK Invest and 21Shares apply for Ethereum ETFs

  • The collaboration showcases an effort to diversify investment options for potential investors in the cryptocurrency space.
  • The SEC’s previous rejections have underscored the stringent regulatory environment surrounding crypto-based financial products.

ARK Invest and 21Shares, prominent investment firms, have submitted joint applications for two Ethereum [ETH] futures exchange-traded funds (ETFs). This move coincided with recent reports indicating that the U.S. Securities and Exchange Commission (SEC) might be on the verge of approving Ethereum ETF applications.

The proposed ETFs were detailed in a filing made to the SEC on 24 August. ARKZ is planned to allocate a minimum of 25% of its total assets to cash-settled Ethereum futures contracts. These include those available on the Chicago Mercantile Exchange (CME).

Conversely, ARKY will feature both Bitcoin [BTC] and Ethereum futures contracts in its composition. Empowered Funds will serve as the investment advisor for these Ethereum products.

Notably, ARK Invest and 21Shares had previously collaborated to launch a spot Bitcoin ETF in the year 2021.

The SEC had previously rejected ARK Invest’s initial two attempts for a Bitcoin spot ETF. The first request was in March 2022, and the other in January. Subsequently, they filed their latest Bitcoin spot ETF application in April, a couple of months ahead of the $10 trillion firm BlackRock’s own application.

Ethereum ETF application filed amid…

The SEC’s scrutiny led to a significant development wherein several Bitcoin spot ETF applications were deemed inadequate. In response, ARK 21Shares and other applicants incorporated surveillance sharing agreements into their applications as a strategic measure.

In addition to their recent Ethereum ETF filings, these investment firms are also eagerly awaiting the outcomes of their applications for the “Ark 21Shares Active Bitcoin Futures ETF” (ARKA) and the “Ark 21Shares Active On-Chain Bitcoin Strategy ETF” (ARKC).

This move is indicative of growing interest within the investment community to tap into the evolving cryptocurrency market. Ethereum has garnered significant attention due to its smart contract capabilities and its role in the decentralized finance (DeFi) ecosystem.

The partnership comes at a time when financial institutions are increasingly exploring opportunities in the cryptocurrency market.

While the SEC’s previous rejections underscore the stringent regulatory environment, the recent developments signal a potential shift in attitude. The anticipation of Ethereum ETF approvals indicates that regulators are acknowledging the maturation of the cryptocurrency market and its integration into traditional financial frameworks.

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