ARK Invest Terminates Contract with 21Shares on Ethereum ETF
Ark Invest, the financial frontrunner, is not going to launch its Ethereum ETF on 21Shares. However, it is important to note that the decision does not make any difference for prior collaborations such as ARK 21Shares Bitcoin ETF debuted in January 2024. Sources have revealed that 21Shares recently updated their Ethereum spot S-1 form.
ARK Invest Ends Business Partnership Due to Changes in Investment Strategies
The application shifted from ARK 21Shares Ethereum ETF to 21Shares Core Ethereum ETF. At the same time, ARK Invest has also concluded the business partnership with 21Shares noting that it is not going to work on launching new ETFs any longer.
The amended S-1 filing indicated no mention of additional fees. A representative from ARK Invest told the media that the firm has decided to refrain from launching an Ethereum ETF despite its groundbreaking potential assessment.
The asset management firm further stated that the decision was made based on a reassessment of the investment strategy. Regardless, the firm is going to keep working in tandem with 21Shares on the development and management of the ARK 21Shares Bitcoin ETF launched in January at the beginning of the ongoing year.
21Shares sponsored the ETF as part of the partnership agreement with Delaware Trust acting as trustee. Ark Invest played a supporting role as a sub-advisor and marketed shares to investors.
Crypto Products Launched by Ark Invest and 21Shares
Ark Invest and 21Shares successfully launched Bitcoin and Ethereum futures under the name Blockchain and Digital Economy Innovation ETFs. The investment product invests in public securities of various firms that operate within the blockchain sector.
As per 21Shares, the investors were able to experience holistic exposure due to the unique approach and nature of the investment vehicle using blockchain technology. ARK Invest and 21Shares also revised the spot Ethereum ETF proposal on 10th May.
However, the regulatory changes enforced by the SEC led the firms to drop the plans for staking a portion of the allocated funds using third-party custodians.
In a 7th February filing, the firms included a new clause that involved preparing 21Shares to receive Ethereum as an incentivized gain against staking. This new clause also classified the side-hustle as additional income created by the fund.
In September 2023, ARK and 21Shares joined hands to file a spot Ethereum ETF. The reserves of this fund will offer direct exposure to Ethereum, listed on the BZX exchange.
Last week, the Securities and Exchange Commission of the US approved 19b-4 form for eight Ethereum ETFs. The Issuers of the ETH ETPs still have to file an S-1 form in order to list shares on a public exchange platform.
Uncertain Future of Altcoin-based ETFs
The filing and approval of an Ethereum spot ETF has opened up debate about more altcoin ETFs. Some of the top nominees in this category are Solana, XRP, Dogecoin and Chainlink.
However, it is too soon to exclaim whether the crypto market is overreaching. The report has suggested that the results of the next US presidential elections may directly impact more crypto ETFs.
At the time, the SEC approved the fund managers to register a spot Ethereum ETF on 23th May 2024. However, Gary Gensler SEC head has retained that the listing process will take time but it has not stopped speculations regarding the next cryptocurrency ETF. Amidst the speculation, Solana has emerged as the most popular contender.
One X user called Joe McCann called the assertion of the same from CNBC as a weird idea. Ophelia Snyder, the co-founder of 21.com who works as a sponsor and financial advisor for Ark Invest Ethereum spot ETF claimed that altcoin ETF expectations among crypto investors should not be too high.
She further stated that ETH ETF approval is unlikely to give rise to a new wave of ETF listings based on crypto. Thus far, the SEC has yet to make any public statements or moves in terms of considering altcoin ETFs.
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