ARK Invest And 21Shares Forge Path For Ethereum ETFs Amid Growing Competition

Key Points:

• ARK Invest and 21Shares team up for the Ethereum ETFs ARKZ and ARKY, advised by Empowered Funds.
• ARKZ focuses on ether futures with potential for diverse assets; ARKY combines bitcoin and ether futures with self-managed ETFs.
• SEC’s delay affects ARK 21Shares Bitcoin ETF amid competition from BlackRock, WisdomTree, and Grayscale in the crypto ETF race.

On August 25, the collaborative efforts of ARK Invest and 21Shares came to light as they jointly submitted two applications for Ethereum futures ETFs.

The first of these, bearing the label ARKZ, is an Ethereum futures ETF, while the second, named ARKY, combines Bitcoin and Ethereum futures ETFs.

Empowered Funds, an affiliate of the white-label ETF platform Alpha Architect, is set to act as the fund adviser for both proposed products.

Specifically, ARKZ would allocate a minimum of 25% of its overall assets to cash-settled ether futures contracts akin to those traded on the Chicago Mercantile Exchange (CME). Additionally, it could diversify its investments into US Treasury securities, money market instruments, and repurchase agreements.

The ARKY ETF follows a similar structure, yet it extends its investment scope to encompass bitcoin futures alongside ether futures contracts. Notably, it will also introduce its own planned ETFs centered around these contracts.

This collaboration stems from the successful partnership between Ark Invest and 21Shares, which initially led to the launch of a spot bitcoin ETF in 2021.

While their initial attempts were thwarted by the U.S. Securities and Exchange Commission (SEC), the organizations have persisted in their pursuit. Their latest proposal is currently under review by the SEC, following a re-filing in April, coinciding with BlackRock’s intentions to enter the Bitcoin ETF space.

The SEC recently announced the initiation of proceedings to evaluate the approval or denial of the Ark 21Shares Bitcoin ETF on August 11. This delay is the latest hurdle in the prolonged endeavor to bring cryptocurrency assets to traditional U.S. financial exchanges.

Among these developments, the Ark 21Shares Bitcoin ETF is positioned as a front-runner in the race for a potential Bitcoin ETF launch.

Although Ark Invest CEO Cathie Wood anticipates the SEC’s decision for multiple funds simultaneously, other prominent entities such as BlackRock, WisdomTree, and Grayscale have already filed their applications.

The latter, Grayscale, awaits a court decision after facing repeated SEC rejections regarding the conversion of the Grayscale Bitcoin Trust into an ETF.

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