ARK Invest has decided to end its partnership with 21Shares for the proposed Ethereum fund, marking a significant shift in the cryptocurrency market. Cathie Wood’s Ark Investment Management has chosen to withdraw from the race to launch an exchange-traded fund (ETF) that would directly invest in Ether, the second-largest cryptocurrency.
The revised prospectus document, known as Form S-1, was filed with the US Securities and Exchange Commission (SEC) on Friday, revealing that Ark’s name had been removed from the application for the spot-Ether ETF that it had initially filed in collaboration with 21Shares. Consequently, the fund’s name has been changed from Ark 21Shares Ethereum ETF to 21Shares Core Ethereum ETF.
Despite this decision, Ark remains dedicated to its Bitcoin fund, the $3.2 billion ARK 21Shares Bitcoin ETF (ticker ARKB), which currently holds the fourth position in terms of assets among Bitcoin ETFs. This move follows Ark’s successful partnership with 21Shares in launching spot-Bitcoin ETFs earlier this year.
The recent approval by the SEC of the 19b-4 filings made by exchanges operated by Cboe Global Markets Inc., Nasdaq, and the New York Stock Exchange to list spot-Ether ETFs has generated anticipation in the market. However, issuers are still awaiting the regulator’s approval of their S-1 statements before trading can commence.
In response to these developments, 21Shares has expressed excitement about the SEC’s approval and reaffirmed their commitment to expanding access to cryptocurrencies as an asset class for US investors. They have also emphasized their ongoing partnership with Ark on the ARK 21Shares Bitcoin ETF, as well as their existing range of futures products.
Several other issuers, including Franklin Templeton, Fidelity Investments, VanEck, and Invesco Ltd., have filed revised S-1 statements, indicating their intentions to launch Ether ETFs. However, the SEC’s decision on these documents is still pending.
Meanwhile, Franklin Templeton has filed an amended document with details of its proposed fund, revealing a planned fee of 0.19%, which will be waived for the first six months on the first $10.0 billion of the ETF’s assets. Notably, Wood’s Bitcoin ETF experienced its largest one-day outflow since its launch earlier this year, with nearly $100 million exiting the fund.
Bloomberg ETF analyst James Seyffart believes that the approval of spot Ethereum ETFs was likely influenced by political decisions rather than purely financial considerations. In a recent interview, Seyffart suggested that the political climate and responses from the crypto community played a significant role in the approval process.
Looking ahead, crypto investor and trader Brian Kelly has suggested that Solana could potentially become the next cryptocurrency to have a spot ETF in the United States. In a recent episode of CNBC’s ‘Fast Money’, Kelly posed the question, “The trade now is, who’s next?” He then highlighted Solana as a potential candidate, alongside Bitcoin and Ethereum, as the leading cryptocurrencies for this cycle.
