- Eric Balchunas suggests eliminating staking addresses potential SEC objections that could hinder approval.
- The crypto sector awaits regulatory decisions that will shape the future of digital assets and ETFs.
ARK Invest and 21Shares revised their spot Ethereum ETF application, removing the staking component to streamline the approval process by the SEC. The decision on this application is expected by May 23, 2024. Previously, the proposal included plans for occasionally pooling the trust’s Ethereum assets through third-party providers to earn staking rewards.
🚨NEW: @ARKInvest/21SHARES removes staking from its $ETH spot application.
Will be interesting to see if others follow. Wonder if this means @SECGov staff are engaging? @JSeyff @EricBalchunas https://t.co/ANPSy8fjeq
— Eleanor Terrett (@EleanorTerrett) May 10, 2024
Eliminating the staking feature is likely intended to simplify the approval process and address potential SEC concerns. Eric Balchunas, a Bloomberg ETF analyst, suggested that removing this aspect could prevent potential objections that might delay or hinder approval.
Hmmmm. Interesting. While it may seem like this is them getting their docs in shape based on SEC comments (which would be good news) there hasn’t been any comments. So its prob either a Hail Mary or maybe trying to give SEC one less thing to use in their rejection. Not sure (yet) https://t.co/CeQwj5ktPn
— Eric Balchunas (@EricBalchunas) May 10, 2024
The revised ETF proposal aims to provide investors with direct access to Ethereum through trading on the Cboe BZX Exchange. It plans to use the CME CF Ether-Dollar Reference Rate—New York Variant for precise pricing. 21Shares serves as the trust sponsor, Delaware Trust Company is the trustee, and Coinbase Custody Trust Company is the asset custodian.
The prospects for SEC approval have diminished, with Balchunas reducing the likelihood of a favorable outcome to 25% by May’s end, down from an earlier estimate of 70%. This reflects the regulatory hesitation affecting the broader cryptocurrency ETF market, as the SEC has postponed decisions on several other proposed funds.
Grayscale Investments has decided to retract its Ethereum Futures ETF application, shifting its attention to transitioning its Ethereum Trust into a spot Ethereum ETF.
If approved, ARK Invest and 21Shares’ revised ETF could impact institutional and retail investors, offering a regulated way for people to invest in digital assets through standard financial channels.
ARK 21SHARES is removing staking from their Spot Ethereum ETF application
(Removed text below) pic.twitter.com/cNrnFesRnD
— Phoenix » PhoenixNews.io (@PhoenixTrades_) May 10, 2024
The evolving regulatory environment remains, as the SEC’s decision on Invesco Galaxy’s spot Ethereum ETF has also been postponed to July 2024. The crypto sector awaits these key decisions, which will shape how traditional financial systems adapt to cryptocurrency assets.
The current price of Ethereum (ETH) is approximately $2,922.41 USD. After analysing recent trends and available technical information, I expect the price of ETH to experience a moderate recovery in the near term, approaching $3,000 USD.
