Cathie Wood Throws Her Ether into the Ring: Ark Invest Aims for America’s First Spot Ethereum ETF

In a landscape where regulation frequently plays catch-up with innovation, one investment firm is pushing the envelope yet again. Cathie Wood’s Ark Invest is doubling down on the crypto world, betting big on Ethereum this time. According to a recent filing with the U.S. Securities and Exchange Commission (SEC), Ark Invest is looking to establish America’s first spot Ethereum ETF, known as the ARK 21Shares Ethereum ETF.

The timing couldn’t be more interesting. Just last week, the SEC said it needed more time to decide on multiple applications for Bitcoin ETFs. This announcement came on the heels of Grayscale’s courtroom win, where the U.S. Court of Appeals for the D.C. Circuit found the SEC’s denial of Grayscale’s application to convert its Bitcoin Trust into a spot ETF as “capricious.”

Ark Invest is no stranger to the SEC’s slow churn, having also faced delays with its spot Bitcoin ETF application. Nevertheless, the investment firm seems undeterred. This new ETF would be traded on the Cboe BZX Exchange and, if approved, could pave the way for other crypto-based investment vehicles.

Coinbase will serve as the custodian in Ark Invest’s application, meaning it will be responsible for holding the Ethereum backing the ETF. The SEC has yet to give the green light for futures-based Ethereum ETFs, but Ark Invest’s new proposal may just break that wall. In 2021, futures-based Bitcoin ETFs made their debut on Wall Street, suggesting that Ethereum futures ETFs might also soon have their moment in the spotlight.

Though the SEC has historically pulled futures-based Ethereum ETF applications about a week after they’re filed, this latest application from Ark Invest is a different animal. In fact, it’s a step beyond existing futures-based bids. The firm argues that the Cboe BZX Exchange’s ability to obtain information on activity in the Chicago Mercantile Exchange’s (CME) Ethereum futures market should suffice to alleviate any regulatory concerns.

Anticipation for approval is high, as the industry is closely watching Ethereum, the second-largest cryptocurrency by market cap, and its potential Wall Street debut. The SEC has suggested it could approve a series of Ethereum futures ETFs as early as October, so Ark Invest’s latest venture may very well kickstart a wave of similar applications.

Senior ETF analyst at Bloomberg, Eric Balchunas, recently tweeted that he expects other firms to follow suit soon, predicting an influx of applications in the wake of Ark Invest’s daring move. Given the backdrop of court decisions favoring crypto investment tools and the SEC’s ongoing deliberations, Ark Invest’s Ethereum ETF bid could be the litmus test that shapes the crypto-ETF landscape for years to come.

Whether the SEC will finally give its nod to spot Ethereum ETFs is anyone’s guess, but one thing is certain: Ark Invest is not waiting around to find out. With a history of being ahead of the curve, this latest move may yet prove to be another feather in Cathie Wood’s disruptively innovative cap.

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Maria Irene
Maria Irenehttp://ledgerlife.io/
Maria Irene is a multi-faceted journalist with a focus on various domains including Cryptocurrency, NFTs, Real Estate, Energy, and Macroeconomics. With over a year of experience, she has produced an array of video content, news stories, and in-depth analyses. Her journalistic endeavours also involve a detailed exploration of the Australia-India partnership, pinpointing avenues for mutual collaboration. In addition to her work in journalism, Maria crafts easily digestible financial content for a specialised platform, demystifying complex economic theories for the layperson. She holds a strong belief that journalism should go beyond mere reporting; it should instigate meaningful discussions and effect change by spotlighting vital global issues. Committed to enriching public discourse, Maria aims to keep her audience not just well-informed, but also actively engaged across various platforms, encouraging them to partake in crucial global conversations.

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