ARK Invest Exits Ethereum ETF Partnership with 21Shares

Cathie Wood’s ARK Investment Management has decided to withdraw from its joint effort with 21Shares to launch an exchange-traded fund (ETF) focused on Ethereum, the second-largest cryptocurrency. According to an amended Form S-1 filed with the US Securities and Exchange Commission (SEC) on Friday, ARK’s name was removed from the application for the spot-Ether ETF. Consequently, the fund’s name was changed from ARK 21Shares Ethereum ETF to 21Shares Core Ethereum ETF.

ARK’s Continued Focus on Bitcoin ETF

Despite this withdrawal, ARK remains committed to its Bitcoin ETF. The ARK 21Shares Bitcoin ETF (ticker ARKB), valued at $3.2 billion, is one of the top Bitcoin ETFs by assets. Earlier this year, ARK and 21Shares successfully launched a spot-Bitcoin ETF.

Market Anticipates SEC Approval

The SEC’s unexpected approval of the 19b-4 filings by Cboe Global Markets Inc., Nasdaq, and the New York Stock Exchange to list spot-Ether ETFs has generated significant anticipation. However, issuers still await the regulator’s approval of their S-1 statements before trading can begin.

In light of these developments, 21Shares expressed excitement about the SEC’s approval and reaffirmed their commitment to broadening cryptocurrency access for US investors. They also emphasized their ongoing partnership with ARK on the ARK 21Shares Bitcoin ETF and their range of futures products.

Competitors in the Race

Several other issuers, including Franklin Templeton, Fidelity Investments, VanEck, and Invesco Ltd., have filed amended S-1 statements, indicating their plans to launch Ether ETFs. Franklin Templeton’s proposal includes a planned fee of 0.19%, waived for the first six months on the initial $10 billion of the ETF’s assets.

Political Influence on Ethereum ETF Approval

James Seyffart, a Bloomberg ETF analyst, suggests that the approval of spot Ethereum ETFs was influenced by political considerations. He believes the political environment, including actions by the Biden administration and reactions from the crypto community, played a significant role. Seyffart also mentioned that other crypto ETFs, like Solana, would require substantial regulatory changes for approval, emphasizing the need for a regulated market to prevent fraud and manipulation.

Speculation on Future Crypto ETFs

Crypto investor and trader Brian Kelly speculated on CNBC’s ‘Fast Money’ that Solana might be the next cryptocurrency to have a spot ETF in the US. Kelly, CEO of BKCM Digital Asset Fund, highlighted Bitcoin, Ethereum, and Solana as the major cryptocurrencies to watch in the current cycle.