ARK Investment Management, led by Cathie Wood, has surprisingly decided to terminate its collaboration with 21Shares to develop a spot traded Ethereum exchange-traded fund (ETF) as per the US Securities and Exchange Commission’s amended prospectus report on May 31, 2021. This decision led to Ark’s name being omitted from the application and the fund being renamed 21Shares Core Ethereum ETF.
ARK Invest has confirmed that they are not currently planning to pursue an Ethereum ETF, but they are still exploring Ethereum’s underlying technology for possible investor exposure. ARK is committed to active management across multiple investment products, such as disruptive innovation equity ETFs, digital asset futures ETFs, and the ARK Venture Fund.
It’s worth noting that ARK was one of the few companies to receive approval from the SEC to launch a Bitcoin ETF (ARKB) in January 2024. This success underscores ARK’s dedication to making Bitcoin accessible through the ARK 21Shares Bitcoin ETF (ARKB).
According to Bloomberg analyst Eric Balchunas, 21Shares will now proceed independently with the Ethereum ETF, removing all references to ARK Invest. Nonetheless, both firms continue collaborating on Bitcoin and futures ETFs.
Ethereum ETF Competition Heats Up
Interestingly, Balchunas also highlighted the lack of specified fee structures in the new S-1 filings. No specified fees have been outlined in the new S-1 filings, which hints at a potential pause in the anticipated price war among issuers as they compete to dominate the Ethereum ETF marketplace.
In the meantime, the SEC has received amended documents from various other major companies, such as Franklin Templeton, Fidelity Investments, VanEck, and Invesco Ltd., which details the modified fees. It is worth noting that Franklin Templeton has come up with an appealing strategy by offering an incredibly low 0.19% expense ratio, waived for six months on the initial $10 billion of AUM in the fund. It should be noted that this bold pricing strategy may lead to a competitive price war that would be seen once the trading of the ETFs starts.
While the SEC has set a deadline for amended S-1 filings, it could take several weeks for these forms to become effective and for trading to commence. VanEck was among the first to submit an updated S-1 form, while BlackRock entered the fray on Thursday, revealing a $10 million seed investment for its ETF. VanEck, on the other hand, has opted for a smaller $100,000 initial investment.
The withdrawal of ARK Invest from the Ethereum ETF race marks a strategic shift for the firm, but its commitment to the digital asset space remains strong. Investors eagerly await the launch of these vehicles, with the potential fee war and competition for market share adding another layer of intrigue to the highly anticipated arrival of US-listed Ethereum ETFs.
Related Reading | Analyst Predicts Bitcoin Surge To $527K, Urges Cautious Optimism Amid Market Volatility
