After the SEC posted the deadline for the draft S-1 from applicants of ETH ETFs, 21Shares filed their draft S-1 with the SEC to receive their final approval before the trading initiation of ETH ETFs. After Vanguard, another investment management company, Cathie Wood’s Ark Invest, is known to have backed out of the ETH ETF race.
Previously, Ark Invest partnered with 21Shares to offer Exchange-Traded Funds for Bitcoin as their underlying, and the same was expected for ETH based on their previous filings.
With the removal of partner Ark Invest, the instrument’s name has also changed from Ark 21Shares Ethereum ETF to 21Shares Core Ethereum ETF.
Highlights of the Amended S-1 Filing
The major change from Amendment 2 to Amendment 3 that caught the eye of all the industry observers is the removal of Ark Invest. James Seyffart of Bloomberg took to his X account to bring attention to this significant change for his followers.
And now we have @21Shares with their S-1. Notably Ark isn't in the name anymore? No Fee. https://t.co/n70rvH4Noa pic.twitter.com/SNiNZZVrX9
— James Seyffart (@JSeyff) May 31, 2024
Another substantial change that was part of the recent amendment file is its zero fee structure for management fees. However, this 0 fee structure is a strategy to attract more investors in the initial period. Thus, it is quite possible that the company might eventually introduce nominal management fees.
This strategy will support the adoption of digital assets, as it will be a good investment option for investors looking for cost-effective ways to gain exposure to Ethereum.
What are the probable reasons for Ark Invest’s sudden move?
Ark Invest and 21Shares continue their existing partnership on a Bitcoin ETF, the Ark 21Shares Bitcoin ETF (ARKB). It justifies the fact that there are no internal disputes between the partners.
Moreover, Cathie Wood signifies her company’s commitment to attracting more investors looking for cost-effective investment opportunities around Bitcoin, considering it a public good.
So, the probable reason could be Cathie Wood, the founder and CEO of Ark Invest, who believes that the decision to suddenly approve the ETH ETF is not fundamental. However, the crypto market has become an election issue, which has led to sudden approval.
This consideration is a basis on which she might not be sure of the growth of the ETH ETF as an affordable and desired investment instrument.
Observing how the SEC will respond to this material change in the offering in the latest draft will be pretty interesting.
