Investment firms ARK Invest and 21Shares have collaborated to apply for two Ethereum futures exchange-traded funds (ETFs) following recent reports indicating that the United States Securities and Exchange Commission (SEC) might soon start approving such applications.
The filing submitted on August 24 to the SEC revealed that the two proposed ETFs are named “ARK 21Shares Active Ethereum Futures ETF” (ARKZ) and “ARK 21Shares Active Bitcoin Ethereum Strategy ETF” (ARKY). To be specific, the filing elucidated that ARKZ would allocate a minimum of 25% of its total assets into cash-settled Ethereum futures contracts like those traded on the Chicago Mercantile Exchange (CME).
ARKY, on the other hand, would include both Bitcoin and Ethereum futures contracts in its composition. For the two Ethereum products, Empowered Funds has been appointed as the investment advisor.
It is worth noting that this collaboration between ARK Invest and 21Shares comes after they partnered last year to introduce a spot Bitcoin ETF. However, their initial attempts to launch such an ETF were rejected by the SEC in January and March of 2022. Subsequently, they filed another application in April, around two months before BlackRock, a $10 trillion firm, submitted its own application for a Bitcoin spot ETF.
Nonetheless, the SEC criticized numerous Bitcoin spot ETF applications for their inadequacy. Consequently, this prompted ARK 21Shares and other applicants to include a surveillance sharing agreement in their applications. This agreement serves the purpose of addressing the SEC’s concerns related to market manipulation and ensuring investor protection.
In addition to the two Ethereum ETF applications, ARK Invest and 21Shares are eagerly awaiting the verdicts on their Ark 21Shares Active Bitcoin Futures ETF (ARKA) and Ark 21Shares Active On-Chain Bitcoin Strategy ETF (ARKC). These ETFs aim to provide investors with exposure to Bitcoin through the utilization of futures contracts and on-chain strategies.
The filing of these applications comes at a time when the demand for crypto-related investment products is ever-increasing. Investors are seeking alternative avenues to gain exposure to digital assets like Bitcoin and Ethereum, and ETFs provide a regulated and accessible means to achieve this objective.
If approved by the SEC, the ARK 21Shares Active Ethereum Futures ETF and the ARK 21Shares Active Bitcoin Ethereum Strategy ETF would add to the growing list of crypto-related ETFs available in the market. These ETFs would enable investors to gain exposure to the price movements of Ethereum and Bitcoin without directly owning the underlying assets.
In conclusion, ARK Invest and 21Shares have joined forces to submit applications for two Ethereum futures ETFs, capitalizing on the potential opportunity presented by the SEC’s growing inclination towards approving such products. These ETFs, if approved, would provide investors with additional avenues to gain exposure to Ethereum and Bitcoin, further expanding the range of crypto-related investment options in the market.