Ethereum pumps after Ark Invest and 21Shares’ spot Ethereum ETF application amendment

  • ETH price surged post-Ark Invest, 21Shares ETF amendment.
  • Amendment aligns spot ETH ETF with cash creation and redemption model akin to spot Bitcoin ETFs.
  • The introduction of ETH staking in amended filing remains uncertain pending regulatory approval.

Ethereum’s native token, ether (ETH), experienced a surge in price, reaching $2,457 before retracing to the current price of $2,424, after news of amendments to the joint spot Ethereum exchange-traded fund (ETF) application by Ark Invest and 21Shares.

Ethereum (ETH) price chart

 

The news was another positive development for the Ethereum ecosystem after the Dencun upgrade was successfully deployed on the Holesky testnet.

Amendment to spot Ethereum ETF application

Ark Invest and 21Shares filed an amendment to their joint application for a spot Ethereum ETF, signalling significant updates in their approach.

The amended S-1 filing introduces a cash creation and redemption policy, mirroring the structure of recently approved spot Bitcoin ETFs. This adjustment aims to streamline the creation process, with authorized participants restricted to cash creations and redemptions, excluding in-kind transactions involving ETH.

The move aligns with regulatory expectations and operational efficiency, reflecting the SEC’s preference for cash-based methods seen in spot Bitcoin ETF approvals.

Additionally, the amended filing introduces the possibility of Ethereum staking, with plans to stake ether tokens from the Trust’s Cold Vault Balance. Staking could potentially generate rewards, treated as income, although it carries a risk of loss. However, uncertainty looms over the inclusion of staking in the final proposal, as indicated by bracketed sections in the filing. Bloomberg ETF analyst James Seyffart remains sceptical, suggesting that the SEC might not permit staking in spot Ethereum ETFs.

Market reaction and expectations

The news of Ark Invest and 21Shares amending their spot Ethereum ETF application has stirred mixed reactions among investors and industry observers. While it marks a positive development for spot Ethereum ETFs, expectations regarding approval vary.

With the SEC’s deadline looming on May 23 for a decision on a spot Ethereum ETF, analysts differ in their predictions. Polymarket reports 43% odds of a May approval, while Seyffart suggests a 60% chance. Standard Chartered Bank is very positive of an approval in May, contrasting with TD Cowen’s expectation of no approval in 2024.

Despite the uncertainty surrounding regulatory approval, Ethereum’s price surge indicates investor optimism and interest in the potential launch of a spot Ethereum ETF. Stakeholders eagerly await further developments in the ETH ETF space, closely monitoring regulatory decisions and industry dynamics.

All Dutch and English crypto news!

AI will be essential in education — but do kids know how to use it?

As AI becomes increasingly prevalent in education, concerns arise over children's proficiency in navigating its complexities and potential pitfalls. News Own this piece of crypto history Collect this...

Spot Bitcoin ETFs shatter trading record with $7.69 billion

Spot Bitcoin ETFs recorded a staggering $7.69 billion in trading volumes on February 28. Top ETF volumes were with BlackRock’s IBIT, Grayscale’s GBTC and Fidelity’s FBTC. Bitcoin...

Bitget Announces Listing of Portal: Revolutionizing the Web3 Gaming Landscape

Victoria, Seychelles, February 29th, 2024, Chainwire Bitget, the leading cryptocurrency exchange and Web3 platform, is thrilled to announce the listing of Portal, a groundbreaking platform set...

Floki DAO outlines proposal to burn 190 billion tokens

New proposal seeks to burn 190 billion FLOKI tokens. Over $11 million worth of FLOKI tokens to be permanently removed if vote passes. Will FLOKI price explode? A...

Beste exchanges

Koop je crypto bij Bitvavo