Ark Investment Management Withdraws from Ethereum ETF race

As an experienced financial analyst, I’ve closely followed the developments in the crypto ETF market and have been particularly intrigued by the recent moves from Ark Investment Management and 21Shares. Based on my analysis of the available information, it appears that Cathie Wood’s team has decided to step back from their Ethereum ETF collaboration with 21Shares, leaving the Swiss firm to pursue this product alone.

Ark Investment Management, headed by Cathie Wood, has stepped back from the competition to introduce a spot-Ether exchange-traded fund (ETF) in collaboration with 21Shares. The updated filing submitted to the US Securities and Exchange Commission (SEC) over the weekend disclosed that Ark’s name was eliminated from the proposal, and the ETF’s title was modified to 21Shares Core Ethereum ETF.

“21Shares is currently handling the Ethereum ETF filing independently, with ARK’s name and involvement removed from the documentation. However, they continue to collaborate with ARK on Bitcoin and futures-based ETF applications. Moreover, there are no stated fees in any of their recent S-1 filings, indicating a pause in the ongoing fee competition.”

— Eric Balchunas (@EricBalchunas) May 31, 2024

A representative from ARK announced that the firm won’t proceed with launching an Ethereum Exchange-Traded Fund (ETF), but they remain dedicated to advancing the ARK 21Shares Bitcoin ETF (ARKB).

The unexpected green light from the SEC for 19b-4 filings from Cboe Global Markets Inc., Nasdaq, and the New York Stock Exchange to list Ether ETFs has spurred several issuers, including 21Shares, to submit revised S-1 statements with renewed excitement. This development marks a significant expansion of crypto investment opportunities for US investors.

Multiple entities, such as Franklin Templeton, Fidelity Investments, VanEck, and Invesco Ltd., have made revisions to their SEC submissions. Among them, Franklin Templeton intends to impose a management fee of 0.19% on its fund. This charge will be exempted for the initial $10.0 billion worth of assets in the ETF during the first six months following its introduction.

The affordable 0.19% sponsor fee charged by Franklin Templeton sets them apart in the competition, making them the most cost-effective choice among their rivals.

The SEC has given a deadline for Ethereum spot ETF applicants, such as VanEck and BlackRock, to submit amended S-1 forms. However, it could take several weeks before these forms are approved and the new ETFs begin trading. BlackRock revealed a $10 million initial investment for its ETF, while VanEck disclosed a smaller seed investment of $100,000.

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2024-06-01 05:56