Cathie Wood’s ARK Invest is the second firm to back out of the race to issue a spot Ethereum ETF product.
ARK Invest Continues Partnership With 21Shares
A few months ago, the company filed an application with the United States Securities and Exchange Commission (SEC) to issue Ethereum ETF in conjunction with 21Shares. In a sudden change of stance, ARK Invest released an official announcement detailing its decision to truncate its Ethereum ETF pursuit.
According to the company, it still believes in Ethereum’s “transformative potential and long-term value.”
It is worth noting that the latest decision does not impact ARK Invest’s relationship with 21Shares as its spot Bitcoin ETF partner.
The investment management firm was clear that both parties will continue their partnership on spot Bitcoin ETFs which was launched at the beginning of this year. It only means that 21Shares would be going on the spot Ethereum ETF journey on its own.
Such a change in stance comes as a surprise to the broader crypto ecosystem considering that the U.S. SEC gave its approval to spot Ethereum ETF trading a few days back.
Ethereum ETF Fee Wars Resumes
Notably, the firm gave no reason for this move. However, senior Bloomberg ETF analyst Eric Balchunas suspects that ARK Invest’s decision hinges on the ongoing fee war amongst spot Ethereum issuers. Unfortunately, the disparity in sponsor fees plays a significant role in determining how profitable the issuers will become in the long term.
Franklin Templeton, one of the filers for spot Ethereum ETF recently submitted an updated S-1 application to the Commission and it included a 0.19% sponsor fee for its proposed rule change. This low fee makes the race more competitive for the other issuers as they may try to meet up with Franklin Templeton’s fee.
The 0.19% basis point was the same fee that Franklin Templeton adopted for its spot Bitcoin ETF. This made it the Bitcoin ETF with the lowest fee.
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