In a groundbreaking move, asset management firms Ark Invest and 21Shares have submitted an application to the U.S. Securities and Exchange Commission (SEC) for the establishment of an Ether-based Exchange-Traded Fund (ETF). This marks the first attempt to list an ETF in the United States that would directly invest in Ether (ETH), the cryptocurrency with the second-largest market capitalization.
The proposed Ether ETF, dubbed the Ark 21Shares Ethereum ETF, plans to have its assets custodied by Coinbase Custody Trust Company. The SEC is expected to make a decision on or before mid-October.
Ophelia Snyder, co-founder of 21Shares, commented on the Ether ETF application, stating that Ethereum markets are becoming more established:
Earlier this year, Cboe Global Markets also filed a proposal to list and trade shares of a spot Bitcoin ETF by Ark Invest and 21Shares on the Cboe BZX exchange. However, the SEC postponed its decision. The regulatory body has historically been cautious, rejecting numerous applications for spot Bitcoin ETFs due to concerns over trading surveillance and potential market manipulation.
This application comes on the heels of a significant court ruling last month. The U.S. District of Columbia Court of Appeals determined that the SEC was incorrect in denying Grayscale Investments, a crypto asset manager, the ability to list a Bitcoin ETF. This case has been under the microscope by both the cryptocurrency and asset management sectors, as they have been lobbying the SEC for years to greenlight a spot Bitcoin ETF.
Upon the announcement of Ark Invest and 21Shares’ application for an Ether ETF, Ethereum’s price experienced a notable increase but quickly reverted to its pre-announcement level, settling around $1,630. This rapid fluctuation indicates that the market is adopting a cautious stance as it awaits further developments from the SEC.
