Ether Surges Past $2,400 as Ark Invest and 21Shares Amend ETF Filing

Estimated read time 3 min read
  • Ether (ETH) reached a two-week high of over $2,400 following the announcement of an amended ETF filing by Ark Invest and 21Shares, aiming for SEC approval.
  • The amendment includes a cash creation and redemption mechanism, aligning with SEC preferences, and introduces the potential for ether staking in the ETF’s operations.

Ethereum’s native token, ether (ETH), soared to a two-week high of $2,400 on Wednesday, riding on the wave of optimism generated by a significant amendment to the ETF filing by asset managers Ark Invest and 21Shares. This price surge underscores the growing anticipation and confidence among investors and traders in the cryptocurrency market.

Strategic Amendments for Regulatory Approval

The revised submission to the U.S. Securities and Exchange Commission (SEC) introduces a critical change in the ETF’s structure by incorporating a cash creation and redemption mechanism. This adjustment is particularly significant, as it mirrors a previously SEC-favored feature in the approval process for spot bitcoin ETFs earlier in January.

Ark Invest and 21Shares have strategically aligned their ETH ETF proposal with the regulatory framework that has facilitated the approval of bitcoin ETFs. This move is seen as a calculated effort to navigate the complex regulatory landscape and secure SEC approval for their innovative product.

Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, highlighted the importance of these amendments. In a social media post, Balchunas emphasized that the update to rely solely on cash creations and other adjustments brings the proposal in line with the recently approved spot BTC ETF prospectus. This development indicates a positive trajectory towards the potential approval of the ETH ETF, reflecting an increasing acceptance of cryptocurrency-based investment products within the traditional financial ecosystem.

Innovating Fund Operations Through Staking

The proposal’s updated documentation also delves into the possibility of engaging in ether staking through one or more trusted third-party staking providers. This addition opens up new avenues for the fund to participate in staking activities, offering a chance to lock up a portion of its holdings in return for rewards. Staking is a vital component of the Ethereum network’s consensus mechanism, especially following its transition to a proof-of-stake (PoS) model with the Ethereum 2.0 upgrade.

Including staking in the ETF’s operational framework not only diversifies the fund’s revenue streams but also deepens its integration with the underlying blockchain technology. The market responded positively to the announcement, with ETH’s price climbing nearly 2% within an hour, breaking above the $2,400 threshold for the first time since January 22.

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