Cathie Wood’s ARK and 21Shares Apply for Spot Ethereum ETF

ARK Invest and 21Shares File for Ethereum ETF

Asset managers ARK Invest and 21Shares have submitted an application for an exchange-traded fund (ETF) that will directly invest in Ethereum, the second-largest cryptocurrency. This filing was made public on Wednesday.

The proposed ETF, named the Ark 21Shares Ethereum ETF, plans to hold its assets with a prominent U.S. cryptocurrency exchange. This application marks a significant step, as it is the first attempt to launch a spot ETF for Ethereum in the U.S. market.

This filing follows a recent court ruling that was favorable to Grayscale, a digital asset manager, regarding its application for a spot Bitcoin ETF—an application previously rejected by the SEC. This court decision has brought the U.S. closer to potentially listing its first spot Bitcoin ETF, although the SEC has indicated it plans to appeal.

Despite the momentum surrounding Bitcoin, the first-place cryptocurrency has faced multiple rejections by the SEC when it comes to establishing a spot ETF, including efforts from ARK and 21Shares. The SEC is also expected to announce its decision on an Ethereum futures ETF application in the coming months.

Following the filing, both Ethereum and Bitcoin experienced a brief spike in value but subsequently reversed their gains and were trading lower later in the day. The cryptocurrency market has been negatively impacted this week by a strengthening dollar, as investors await further insights on U.S. monetary policy ahead of a Federal Reserve meeting later in the month.

While Grayscale’s legal win is likely to encourage more ETF applications and institutional interest in cryptocurrencies, the sector is also facing a notable decline in retail interest, influenced by a series of high-profile scams and bankruptcies over the past year. Additionally, regulatory actions against major players in the industry, particularly a notable cryptocurrency exchange, have shaken investor confidence.

Despite these challenges, ARK’s CEO has maintained a largely optimistic outlook for the cryptocurrency market, with her ARK funds being significant shareholders in the aforementioned exchange.