Business News Report
February 08, 2024

ARK Investment and 21Shares Revise Ethereum ETF Proposal, Improve Cash Creation and Redemption

ARK Investment and 21Shares Pivot Ethereum ETF Proposal, Address Cash Creation and Redemption Process

A revised spot Ethereum exchange-traded fund (ETF) proposal from investment management company ARK Investment and 21Shares proposes to only facilitate the delivery of cash in its creation and redemption process. The creation and redemption of shares in ETFs had previously been a focal point in discussions between issuers seeking to launch spot Bitcoin ETFs and the Securities and Exchange Commission (SEC).

The SEC is likely inclined towards a cash model, wherein issuers must promptly sell stored assets to generate cash for returning to investors. This stands in contrast to an in-kind model favoured by certain asset firms such as BlackRock during the approval process for their spot Bitcoin ETF, providing managers with greater flexibility in portfolio management.

Bloomberg Intelligence analyst Eric Balchunas observed a modification in the filing submitted by ARK Investment and 21Shares. 

The revised filing incorporates a new staking component, indicating that the “Sponsor” may periodically engage one or more trusted “Staking Providers” to stake a portion of the “Trust’s” assets. The “Sponsor” anticipates primarily staking ETH, Ethereum’s native tokens from the Trust’s Cold Vault Balance.

“In consideration for any staking activity in which the Trust may engage, the Trust would receive certain staking rewards of ether tokens, which may be treated as income to the Trust. The amount of ether the Trust may receive as a reward for its staking activity can vary significantly,” said the filing. 

ARK Investment and 21Shares Seek Approval for Spot Ethereum ETF 

ARK Investment and 21Shares applied for the spot Ethereum ETF in September, outlining that the fund aims to offer direct exposure to ETH. It is set to trade on the Cboe BZX Exchange, utilizing the CME CF ETH-Dollar Reference Rate.

In the initial filing, 21Shares is identified as the sponsor of the Trust, while Delaware Trust Company serves as the trustee and Coinbase Custody Trust Company acts as the custodian. ARK Investment Management takes on the role of sub-adviser for the Trust, offering support in marketing the 21Shares. Last year, the SEC further postponed the decision timeline for the ARK Investment and 21Shares spot Ethereum ETF and solicited public comments. 

Recently, the agency has extended deadlines for proposals from various other asset management companies, including Grayscale Investments, Fidelity, BlackRock and the Invesco Galaxy.

The amended application from ARK Investment and 21Shares, highlighting a cash model and incorporating staking components, is set to facilitate the potential timely approval of the spot Ethereum ETF, reflecting the evolving dynamics in the regulatory landscape.   

Disclaimer

In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.

About The Author

Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at [email protected]

More articles
Alisa Davidson
Alisa Davidson

Alisa is a reporter for the Metaverse Post. She focuses on investments, AI, metaverse, and everything related to Web3. Alisa has a degree in Business of Art and expertise in Art & Tech. She has developed her passion for journalism through writing for VCs, notable crypto projects, and scientific writing. You can contact her at [email protected]

Hot Stories

Top 10 Crypto Games to Invest in 2024

by Viktoriia Palchik
February 27, 2024
Join Our Newsletter.
Latest News

Top 10 Crypto Games to Invest in 2024

by Viktoriia Palchik
February 27, 2024

How to Automate Mining With AI?

by Viktoriia Palchik
February 27, 2024

NFTs & Mining: A Digital Synergy

The rise in usage of the non-fungible tokens has changed the way we see and engage with ...

Know More

AI in Crypto

Explore the ever-evolving realm of artificial intelligence within the cryptocurrency sphere. Discover the transformative impact of AI ...

Know More
Join Our Innovative Tech Community
Read More
Read more
Anonymous Dogwifhat (WIF) Trader Bags $1.4M Profit Investing $310 as the Memecoin Surges 50%
Markets News Report
Anonymous Dogwifhat (WIF) Trader Bags $1.4M Profit Investing $310 as the Memecoin Surges 50%
February 27, 2024
HTX Re-Applies for Hong Kong Virtual Asset Trading License Days After Withdrawal
Markets News Report
HTX Re-Applies for Hong Kong Virtual Asset Trading License Days After Withdrawal
February 27, 2024
How to Automate Mining With AI?
News Report
How to Automate Mining With AI?
February 27, 2024
Craig Wright’s Former Lawyers Challenge Authenticity of Emails Shared by his Wife in COPA Trial
Business News Report
Craig Wright’s Former Lawyers Challenge Authenticity of Emails Shared by his Wife in COPA Trial
February 27, 2024
What You
Need to Know

Subscribe To Our Newsletter.
Daily search marketing tidbits for savvy pros.