In January, ARK Invest partnered with 21Shares to introduce a spot bitcoin ETF called ARKB, which has been very successful, attracting billions in investments. Now, the duo has applied for a spot in an ethereum ETF, currently under review by the SEC.
While ARK and 21Shares did not provide a formal comment, they updated their filing for the spot ethereum ETF application by removing a clause related to staking. Originally, they planned to stake ETH held by the firms, but this clause was excluded in the update. ETF analyst Eric Balchunas noted that the change was not prompted by the SEC, speculating that it may be a preemptive move to increase the application’s chances of approval.
The issue of staking has been seen as a potential hurdle for spot ethereum ETF approval, with the novelty of the system possibly causing delays. By excluding it from their application, ARK may improve their chances of approval, albeit at the cost of missing out on staking rewards.
The SEC has already delayed decisions on several applications, with final decisions on the VanEck ETH ETF and ARK 21Shares’ ETF expected by late May. While Cathie Wood, CEO of ARK Invest, is bullish on cryptocurrency, she acknowledged that the crypto ETF market may not see significant growth beyond bitcoin and ether approvals.
The likelihood of a spot ethereum ETF approval seems uncertain, with the SEC rarely commenting on the topic. Approval may not occur soon, with potential approval in late 2024 or 2025 seeming more likely.