As the US Securities and Exchange Commission (SEC) is reviewing a swath of applications for spot Bitcoin ETFs, Ark 21Shares and VanEcK have started the bid to launch the next big thing: spot ETFs of Ethereum.
Chicago Board Options Exchange (Cboe), on Wednesday, September 6, filed two 19b-4 applications with the SEC to list ARK 21Shares Ethereum ETF and VanEck Ethereum ETF investment products on Cobe’s BZX exchange. The SEC will now have 240 days after the confirmation of the application to make a ruling.
BOOM: ARK just filed for a Spot Ether ETF, the first one.. prob more coming imminent pic.twitter.com/PjK5aSNPlS
— Eric Balchunas (@EricBalchunas) September 6, 2023
The Race is on for Spot Ethereum ETF
It is important to note that S-1 and 19b-4 filing are quite different. The S-1 form is filed by firms that intend to list a particular investment product on a national exchange. The 19b-4 form is filed by self-regulatory organizations (SROs), such as stock exchanges, to make changes to their rules, specifically with regard to trading rules.
While Ark Invest and 21Shares have teamed up for S-1 filing, VacEcK’s filing dates back to July 2021. Registration with S-1 is a lengthy process that can continue until the SEC is satisfied with its disclosure requirements. Under the 19b-4 process, the SEC has to respond within a timeframe.
As noted by Bloomberg analyst James Sayffart, with the 19b-4 filing by Cboe, the race for a spot Ethereum ETF is officially on. Given the 240-day review process, he estimates May 23, 2024, as the date for the decision on these filings. Another ETF analyst, Eric Bulchunas, believes that more such filings are imminent.
The Spot #Ethereum ETF Race is officially on. It's early but i'd estimate a final deadline on these applications to be around ~May 23, 2024.
Notably, we didn't see a VanEck spot Ethereum ETF S-1 from VanEck earlier because they filed for this thing all the way back in 2021!! pic.twitter.com/jLve8PpPrE
— James Seyffart (@JSeyff) September 6, 2023
Per the Ark 21Shares filing, Coinbase will act as both a surveillance-sharing partner and the custodian of Ether (ETH) for the ETF, similar to the role it expects to play with a broad swath of spot Bitcoin ETFs. 21Shares will serve as a sponsor, with Ark Invest as a sub-advisor for the ETF. The product will track the performance of ETH measured by the CME CF Ether-Dollar Reference Rate – New York Variant.
VanEck’s filing didn’t mention its custodian and surveillance-sharing partner. Some sources Coinbase will serve as surveillance-sharing for VanEck Ethereum ETF, too. The ticker symbol for both ETFs has not yet been available.
According to an August 3 Crypto Economy report, the SEC is silent about the approval of any Ethereum ETFs. In the same line, the agency has yet to approve a spot crypto ETF. Several firms, including Grayscale Investments and BlackRock, are currently fighting to get a spot ETF Bitcoin approved.