The Rise of Ethereum ETFs
You, as a crypto enthusiast, have likely been following the push for SEC approval of spot bitcoin ETFs. However, the latest development in the ETF space has taken an exciting turn with the introduction of two ethereum-based spot ETF applications. In a collaborative effort, Ark Invest and 21shares have joined forces, with 21shares acting as the trust’s sponsor. Notably, Coinbase Custody has been entrusted with the responsibility of safeguarding the fund’s valuable ether reserves.
The filing details of Ark and 21shares emphasize that the trust will solely invest in ether and not derivatives. This approach aims to provide investors like you with a convenient and cost-effective way to gain exposure to ether without the need to directly purchase, hold, and trade it.
BOOM: ARK just filed for a Spot Ether ETF, the first one.. prob more coming imminent pic.twitter.com/PjK5aSNPlS
— Eric Balchunas (@EricBalchunas) September 6, 2023
Partnerships and Expansion
In a development dating back to June 2023, Coinbase was chosen as the surveillance-sharing agreement (SSA) partner for both Ark Invest and 21shares. This strategic alliance sets the stage for their ETF venture. Additionally, the fund has also partnered with the Bank of New York Mellon and aims to list through Cboe’s BZX exchange.
In a parallel move, Vaneck has embarked on a similar journey, appointing Coinbase as their SSA partner. Vaneck takes on the roles of market agent and sponsor for the ETH trust, with State Street Bank handling administration. Each share in the trust represents a fractional interest in the securely held ETH assets managed by the custodian on behalf of the trust.
Vaneck’s registration details highlight that the trust intends to hold primarily ETH, with minimal cash or cash equivalents. However, there may be exceptional circumstances where the trust temporarily holds cash.
Hot Take
The introduction of ethereum-based spot ETF applications marks an exciting milestone in the cryptocurrency market. These ETFs provide you, as an investor, with a convenient and cost-effective way to gain exposure to ether. The partnerships formed by Ark Invest, 21shares, and Vaneck with industry leaders such as Coinbase and State Street Bank further solidify the legitimacy and potential of these ETFs. With the growing interest in ethereum and the development of innovative investment products, the crypto market continues to evolve and offer new opportunities for investors like you.
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