Ethereum

2024

ARK 21Shares has amended its spot Ether exchange-traded fund (ETF) application to adopt a cash-creation model — similar to its approved spot Bitcoin&nbsp;ETF — and has also floated plans to stake a portion of the ETF’s Ether&nbsp;to generate additional income.&nbsp;
In December 2023, ARK 21Shares and BlackRock were among the first issuers to convert their spot Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>) ETFs to a <a href="https://cointelegraph.com/news/ark-blackrock-bitcoin-etf-sec-cash-create">cash creation and redemption model</a> following back-and-forth meetings with the United States securities regulator.
ARK 21Shares initially proposed an in-kind redemption model for its spot Ether (<a href="https://cointelegraph.com/ethereum-price">ETH</a>) ETF, which also implies non-monetary payments such as BTC.
Under the cash creates model, ARK 21Shares would purchase Ether equivalent to the order amount and deposit the resulting Ether in the trust’s account with the custodian. Shares of the spot Ether ETF are then created.
Bloomberg ETF analyst Eric Balchunas said the changes, <a href="https://www.sec.gov/Archives/edgar/data/1992508/000121390024010722/fs12024a1_ark21shares.htm" target="_blank" rel="noopener nofollow">detailed</a> in its latest Form S-1 amendment filed on Feb. 7, now “bring it in line” with approved spot Bitcoin ETFs.
<blockquote class="twitter-tweet">
 HERE WE GO AGAIN: ARK/21Shares has just filed an amended S-1 for their spot Ether ETF, looks like they updated to be only cash creations and some other things that bring it in line w the recently approved spot btc etf prospectus.. <a href="https://t.co/clN2oZmA6I">pic.twitter.com/clN2oZmA6I</a>— Eric Balchunas (@EricBalchunas) <a href="https://twitter.com/EricBalchunas/status/1755268354355368379?ref_src=twsrc%5Etfw">February 7, 2024</a>
</blockquote> 
The Cathie Wood-led firm acknowledged the cash creates model may adversely affect the arbitrage transactions by authorized participants intended to keep the share price closely linked to Ether.
<h3 data-ct-non-breakable="true" id="ether-staking-plans-floated">Ether staking plans floated</h3>
The ETF issuer’s latest S-1 filing also proposes adding a staking element to its spot Ether ETF.
<blockquote data-ct-non-breakable="true">
 “The Sponsor may, from time to time, stake a portion of the Trust’s assets through one or more trusted third party staking providers.”
</blockquote>
ARK 21Shares said it would expect to stake Ether from the trust’s cold vault balance and that the trust would receive staking rewards, treated as income, as a result.
<blockquote class="twitter-tweet">
 All the TradFi people are going to absolutely salivate over the real yield that a staked spot ETH ETF can offer You don't own enough ETH— sassal.eth/acc (@sassal0x) <a href="https://twitter.com/sassal0x/status/1722793654643998724?ref_src=twsrc%5Etfw">November 10, 2023</a>
</blockquote> 
ARK 21Shares acknowledged staking activity comes with risks, such as <a href="https://cointelegraph.com/news/lido-finance-launchnodes-validator-slashed">losing ETH via slashing</a>, and that staked ETH would, in some instances, be locked up for extended periods of time.
Finance lawyer Scott Johnsson <a href="https://x.com/SGJohnsson/status/1755276919589720080" target="_blank" rel="noopener nofollow">noted</a> the staking-related paragraphs were put in brackets, explaining that this often means the applicant would ideally like to add it and is open to having a conversation with the regulator about it.
<blockquote class="twitter-tweet">
 Interesting, adding a staking component (in brackets): <a href="https://t.co/x8uhHZPxJX">https://t.co/x8uhHZPxJX</a> <a href="https://t.co/dOilIKEyrs">pic.twitter.com/dOilIKEyrs</a>— Scott Johnsson (@SGJohnsson) <a href="https://twitter.com/SGJohnsson/status/1755273120317854066?ref_src=twsrc%5Etfw">February 7, 2024</a>
</blockquote> 
Bloomberg ETF analyst James Seyffart <a href="https://x.com/JSeyff/status/1755289085722145039" target="_blank" rel="noopener nofollow">said</a> his “base case” is that the SEC won’t allow staking as part of the spot Ether ETFs. “But time will tell,” he added.
Related: <a href="https://cointelegraph.com/news/ethereum-short-term-price-action-may-take-traders-by-surprise-heres-why">Ethereum’s short-term price action ‘may take traders by surprise’ — Here’s why</a>
Seyffart fellow Bloomberg ETF analyst Eric Balchunas recently <a href="https://x.com/JSeyff/status/1752080210269221146" target="_blank" rel="noopener nofollow">lowered</a>&nbsp;the odds of a spot Ether ETF approval in 2024 from 70% to 60% on Jan. 30.
The United States Securities and Exchange Commission must decide on VanEck’s application by May 23, on ARK 21Shares by May 24, on Hashdex by May 30, on Grayscale by June 18 and Invesco by July 5.
Fidelity and BlackRock’s applications must be decided by Aug. 3 and Aug. 7.
However, Seyffart expects a decision to be made on all applicants by May 23 — similar to how the U.S. securities regulator <a href="https://cointelegraph.com/news/sec-spot-bitcoin-etf-approvals">made a decision on all spot Bitcoin ETFs</a> on Jan. 10.
Magazine: ‘<a href="https://cointelegraph.com/magazine/account-abstraction-supercharges-ethereum-wallets-dummies-guide/">Account abstraction’ supercharges Ethereum wallets: Dummies guide</a>

ARK 21Shares refiles spot Ethereum ETF with cash creates, adds staking

목차

Cointelegraph

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