Ark Invest, the investment firm led by Cathie Wood, has filed for a spot Ethereum ETF with the U.S. Securities and Exchange Commission (SEC). The proposed fund, called ARK Ethereum Trust, would track the performance of Ethereum, the second-largest cryptocurrency by market capitalization.
According to the filing, the trust would hold Ethereum tokens and value its shares based on the daily net asset value (NAV) of Ethereum as calculated by the CF Ether-Dollar US Settlement Price. The trust would not invest in derivatives or futures contracts but would only hold spot Ethereum.
The filing comes as the SEC is reviewing several applications for Bitcoin ETFs, which have been pending for years. The regulator has repeatedly delayed or rejected such proposals, citing concerns over market manipulation, custody, and investor protection. However, some analysts believe that the SEC may be more open to approving a spot ETF than a futures-based one, as the former would have a direct impact on the underlying asset’s demand and supply. The SEC has also asked for public comments on various aspects of the proposed spot ETFs, such as their valuation, custody, arbitrage, and liquidity.
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The latest deadline for the SEC to approve or reject a spot ETF is November 14, 2023, when it will rule on the application from VanEck, one of the largest and most experienced ETF providers in the US. However, the SEC could also extend the review period for another 240 days, or ask for more information from the applicants, which would delay the decision further. Alternatively, the SEC could approve a spot ETF before the deadline, if it is satisfied that all the issues have been addressed and resolved.
Ark Invest is one of the most prominent and influential investors in the crypto space, with over $50 billion in assets under management. The firm has been actively investing in crypto-related companies, such as Coinbase, Grayscale, Square, and Tesla. Wood has also expressed her bullish views on Bitcoin and Ethereum, predicting that they could reach $500,000 and $40,000 respectively in the long term.
If approved, ARK Ethereum Trust would be the first spot Ethereum ETF in the U.S., and potentially a major catalyst for the adoption and growth of the crypto industry. However, given the SEC’s history of skepticism and caution towards crypto ETFs, it is unclear when or if the regulator will greenlight Ark Invest’s proposal. The approval of a spot ETF would be a major milestone for the bitcoin industry, as it would signal the recognition and acceptance of bitcoin as a legitimate asset class by one of the most influential regulators in the world.
Many investors are eagerly awaiting the decision of the US Securities and Exchange Commission (SEC) on whether to approve the first spot exchange-traded fund (ETF) that tracks the price of bitcoin and Ethereum. A spot ETF would allow investors to buy and sell shares of a fund that holds Bitcoin and Ethereum directly, rather than through futures contracts or other derivatives. This would potentially lower the costs and risks associated with investing in bitcoin, as well as increase its liquidity and accessibility.
It would also likely boost the demand and price of bitcoin, as more institutional and retail investors would be able to access it through a familiar and regulated vehicle. However, the rejection of a spot ETF would be a setback for the industry, as it would indicate that the SEC still has serious reservations about the viability and security of bitcoin as an investment.