Sources believe the SEC is likely to approve Ethereum futures ETFs, which would enable investors to speculate on the future price of Ethereum without direct spot exposure.
Market sentiment throughout August has been fairly subdued compared with July, but the ETF race has received a boost of optimism this week from ARK Invest – Cathy Wood’s $50 billion investment firm.
A new US Securities and Exchanges (SEC) filing dated to August 24 reveals that ARK has teamed up with 21Shares in a new application for an Ethereum futures ETF application.
While progress on Bitcoin ETF approval has been slow and uncertain, a Bloomberg report revealed last week that the SEC is likely to approve Ethereum futures ETF applications, citing anonymous sources. Approval could come as soon as October, the source claims.
The two proposed Ethereum futures ETFs are “ARK 21Shares Active Ethereum Futures ETF” (ARKZ) and the “ARK 21Shares Active Bitcoin Ethereum Strategy ETF” (ARKY).
The ARKZ ETF would invest a quarter of its total assets in cash-settled Ethereum futures contracts, such as those traded on the Chicago Mercantile Exchange (CME), according to the filing. ARKY on the other hand will encompass both Bitcoin and Ethereum futures contracts.
Empowered Funds is the assigned investment advisor on both Ethereum products.
An Ethereum futures ETF would enable investors to speculate on the future price of Ethereum without actually owning the cryptocurrency itself, providing exposure and diversification to Ethereum with less risk than direct ownership.
Eric Balchunas, a senior ETF analyst at Bloomberg, commented that he was not surprised about the optimism surrounding the SEC approving an Ethereum futures ETF.
Writing on X, he said, “This not surprising to us, we had said they would approve Ether Futures early on in race. Nice to be validated. Now what does it mean for spot? Hard to say beyond it shows that their views, policy, and tolerance can change.”
This isn’t ARK Invest’s first partnership with 21Shares – the pair launched a spot Bitcoin ETF application back in 2021, which was unsuccessful.
Asset giant BlackRock sparked the biggest wave of excitement relating to Bitcoin ETFs, but ARK Invest is reportedly first in line for SEC approval, based on the timeline of applications.
ARK recently amended its Bitcoin application to include a surveillance sharing agreement which would facilitate the sharing of data and information with the SEC in order to prevent market manipulation, and to ensure regulatory compliance.
Multiple crypto executives have expressed optimism that these agreements will be the “key” to long-awaited SEC approval. Speaking with CNBC on June 26, Jeremy Schwartz, Global Chief Investment Officer at WisdomTree, a key Bitcoin ETF applicant, said that surveillance agreements will help the SEC feel “more comfortable” with the concern of market manipulation.
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