ARK Invest proposes the creation of an Ethereum spot ETF.

ARK Invest proposes the creation of an Ethereum spot ETF.

ARK Invest Seeks Approval for Ethereum (ETH) ETF from SEC

ARK Invest recently submitted an official request to the SEC for the issuance of a spot Ethereum (ETH) ETF. If this request is approved, it would mark the first ETF to be directly collateralized in Ethereum (ETH) and authorized by the United States equity market overseer.

Exploring ETFs on Ethereum

Although while ETFs on Ethereum (ETH) already exist in Europe and Canada, they are collateralized directly in Ethereum (ETH). In the United States, only ETFs based on Ethereum (ETH) price futures contracts have received approval. The SEC has been hesitant to approve ETFs directly based on digital currencies, opting instead for futures contract-based ETFs.

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Following the recent ruling against the SEC in the Grayscale case, numerous believe that the agency no longer has the  probable to reject similar ETF applications. Notably, BlackRock, a major player in the financial industry, is between the applicants, boasting a high approval rate for its ETF requests.

The Advantages of Cryptocurrency ETFs

Cryptocurrency ETFs that replicate digital currency price movements offer plenty of advantages. Firstly, investors do not need to personally custody the digital currencies as the fund manager takes on this responsibility. In addition, these fully regulated instruments trade on traditional exchanges, making them accessible to institutional clients and those who prefer using regulated financial products.

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Nonetheless, drawbacks include the reliance on third-party custody, the need to use the traditional financial system, and the inability to trade peer-to-peer.

About ARK Invest and Their Ethereum (ETH) ETF

ARK Investment Management, established in 2014 by Cathie Wood, is a renowned United States investment management company that manages numerous actively managed ETFs. They became one of the top 10 ETF issuers universally and are now seeking approval for their spot Ethereum (ETH) ETF, was known Ark 21Shares Ethereum (ETH) ETF, in partnership with 21Shares, a leading cryptocurrency ETF issuer based in Switzerland.

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The Ethereum (ETH) holdings will be entrusted to Coinbase Custody Trust Company.

Hot Take

The prospect of an Ethereum (ETH) ETF represents a whole lot of milestone for the cryptocurrency market. If approved, it might open doors for increased institutional participation and further legitimize digital assets within traditional financial systems.

Author – Contributor at | Website

Leo Nomist emerges as a maestro harmonizing the roles of crypto analyst, tenacious researcher, and editorial virtuoso, creating an unparalleled symphony of insight. Amidst the intricate world of digital currencies, Leo’s perspectives resonate like finely tuned chords, capturing the attention of curious minds from diverse horizons. His talent for deciphering complex threads of crypto intricacies blends seamlessly with his editorial finesse, translating intricacy into a captivating composition of understanding.

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