After the SEC postponed its decision on the ARK 21Shares Spot Bitcoin ETF on August 11, Cathie Wood’s ARK Invest and 21Shares have swiftly applied for a separate Ethereum futures ETF, possibly adopting a dual strategy.
ARK Invest Enters Ethereum Futures ETF Competition
In a document sent to the SEC on August 24, ARK Invest and 21Shares shared their plans. They will work together to manage two separate funds that want to invest in Ethereum futures contracts. These funds are the ARK 21Shares Active Ethereum Futures ETF and the ARK 21Shares Active Bitcoin Ethereum Strategy ETF, which focuses on both Bitcoin and Ethereum futures contracts.
This isn’t the first time ARK Invest and 21Shares are teaming up for an ETF. They’ve tried before to offer a Spot Bitcoin ETF, but the SEC delayed their recent request.
If it gets the go-ahead, the ARK 21Shares Active Ethereum Futures ETF, with the ticker ARKZ, plans to invest in “ether futures contracts.” These contracts are traded on special markets like the Chicago Mercantile Exchange (CME).
This fund is all about futures contracts and won’t directly put money in Ether or deal with the “spot” Ether. Futures ETFs just follow how the main thing does, while Spot ETFs actually invest in the thing.
The document also said that any leftover money in the fund would be put into things like US Treasury stuff, money market stuff, and repurchase agreements. These safe investments help the fund have enough money easily available and protect it from changes in its Ether futures investments.
Investing in the Future of Bitcoin and Ethereum
ARK Invest and 21Shares are planning something new – the ARK 21Shares Active Bitcoin Ethereum Strategy ETF, also known as ARKY. This fund’s idea is to invest in contracts that guess how much Bitcoin and Ethereum will be worth later on.
It’s interesting because Valkyrie was trying to do something similar with its Valkyrie Bitcoin Strategy ETF (BTF). Valkyrie wanted to include contracts that predict Ethereum’s future.
The details say there will be two main parts in the fund: “Active Bitcoin Futures ETF” and “Active Ethereum Futures ETF.” So, people can pick if they want to invest in the future of Bitcoin, Ethereum, or both.
Most of the extra money in the fund will be kept in safe things like cash or stuff that’s easy to sell, mainly things from the US government.
ETH price recovers amid high interest from institutional investors | Source: ETHUSD on Tradingview.com
Bullish or Different?
Many regular money companies want to offer a crypto ETF. Some, like ARK Invest and Grayscale, want to offer both futures and spot ETFs. This makes us wonder if they really believe in cryptocurrencies or if there’s something else going on.
An expert named Nate Geraci talked about how the whole BTC futures ETF market has less than $1.5 billion in Assets Under Management (AuM). So, it might not make a lot of money, especially for new players.
But if there’s not much money to be made, why are these companies trying to get into crypto anyway? The former head of BitMEX, Arthur Hayes, thinks they want to control crypto like “gatekeepers” to balance their regular money. He doesn’t think they believe in crypto’s basics but want to make a lot of money when crypto changes how the economy works.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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