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In a recent submission to the US Securities and Exchange Commission (SEC), Ark Invest, a well-known hedge fund management firm founded by Cathie Wood, has filed for the first Ethereum spot Exchange Traded Fund (ETF) in the United States. This move has generated notable excitement within the cryptocurrency market and has particularly impacted the price of Ethereum (ETH).
The proposed financial product is designed to be traded on the Cboe BZX Exchange and will closely track the Ethereum (ETH) price on the spot market, as indicated by the Chicago Mercantile Exchange (CME). Benchmarks is listed as the index manager for the ETF, and the sponsorship comes from 21Shares, a renowned provider of cryptocurrency exchange-traded products (ETPs).
Here we go … expect more spot #ethereum ETFs filings in the coming days.
— James Seyffart (@JSeyff) September 6, 2023
NOTE: this is an S-1 and not a 19b-4. Which means it does not start a clock in any way … yet. Expect 19b-4’s soon. https://t.co/sNus2vr5qV
In addition, Ark Invest has chosen Coinbase, a prominent cryptocurrency exchange, to serve as the custodian for Ethereum (ETH) held within the ETF, mirroring a similar arrangement made in their Bitcoin spot ETF application. The selection of a reputable custodian aligns with the SEC's emphasis on security and custody when evaluating ETF proposals.
The application filed by Ark Invest indicates their belief in Coinbase's robust policies, procedures, and controls for safeguarding and managing the Trust's Ethereum holdings. The custodian, a third-party limited-purpose trust company, was chartered in 2018 under the New York Department of Financial Services.
Notably, the filing for an Ethereum spot ETF marks a significant development in the cryptocurrency ETF landscape, which has been primarily focused on Bitcoin (BTC) ETFs. While the SEC has not yet approved either Bitcoin or Ethereum ETFs, the growing interest in these investment products, along with recent court rulings involving Grayscale, has increased expectations for eventual approvals.
As the cryptocurrency community eagerly awaits the outcome of this application, it is anticipated that more hedge funds and asset managers will follow suit by filing their Ethereum spot ETF applications in the near future, potentially paving the way for greater institutional participation in the cryptocurrency market.
At the time of this writing, Ethereum (ETH) is trading at approximately $1,620, exhibiting sideways movement in recent days.
