The cryptocurrency landscape is evolving rapidly, with institutional interest in Ethereum gaining significant traction. Investment firms ARK Invest and 21Shares are leading the charge and have recently collaborated to propose two Ethereum futures exchange-traded funds (ETFs). This move comes from reports suggesting that the U.S. securities regulator might soon greenlight such applications. Let’s delve deeper into this development and its implications for the crypto market.
A new chapter in Ethereum investment
ARK Invest and 21Shares have jointly filed for two Ethereum futures ETFs, namely the “ARK 21Shares Active Ethereum Futures ETF” (ARKZ) and the “ARK 21Shares Active Bitcoin Ethereum Strategy ETF” (ARKY). According to the filing with the Securities and Exchange Commission (SEC) on August 24, ARKZ aims to allocate 25% of its total assets in cash-settled Ethereum futures contracts. These contracts are similar to those traded on the renowned Chicago Mercantile Exchange (CME). In contrast, ARKY will encompass both Bitcoin and Ethereum futures contracts.
Empowered Funds has been designated as the investment advisor for these Ethereum-centric products, marking a significant step in broadening the investment avenues available for Ethereum enthusiasts.
A history of collaboration and persistence
This isn’t the first time ARK Invest and 21Shares have joined forces in the crypto domain. The two firms initially partnered in 2021 to introduce a spot Bitcoin ETF. However, their initial endeavors faced regulatory hurdles. The SEC rejected their first two attempts in March 2022 and January. Their latest Bitcoin spot ETF application was submitted in April, shortly before the financial giant BlackRock filed it.
Interestingly, the SEC has deemed many Bitcoin spot ETF applications as insufficient. This feedback led ARK 21Shares and other applicants to incorporate a surveillance-sharing agreement into their applications, showcasing their adaptability and commitment to meeting regulatory standards.
Furthermore, the outcomes for the “Ark 21Shares Active Bitcoin Futures ETF” (ARKA) and “Ark 21Shares Active On-Chain Bitcoin Strategy ETF” (ARKC) are also eagerly anticipated by the investment community.
Ethereum’s growing influence
Ethereum’s potential is increasingly being recognized in the financial world. Ethereum’s decentralized finance (DeFi) capabilities and its transition to Ethereum 2.0 are garnering attention. The recent move by ARK Invest and 21Shares further underscores Ethereum’s rising stature in the investment realm.
The collaboration between ARK Invest and 21Shares in proposing Ethereum futures ETFs is a testament to the growing institutional interest in cryptocurrency. As regulatory bodies like the SEC become more receptive to crypto-based financial products, the landscape is set to evolve further.
While the outcomes of these ETF applications remain to be seen, one thing is clear: the fusion of traditional finance and cryptocurrency is gaining momentum. As these worlds converge, investors can look forward to more investment opportunities, blending the best of both realms.