ARK 21Shares presents fresh Ethereum ETF concept featuring cash creation model and staking strategy

ARK 21Shares has recently made changes to its application for an Ethereum exchange-traded fund (ETF), moving towards a cash-creation model similar to its approved Bitcoin ETF. The amendment, filed on Feb. 7, also includes plans to stake a portion of the ETF’s Ether holdings to generate additional income. This strategic pivot follows the successful transition of its Bitcoin ETFs to a cash creation and redemption model in December, after discussions with the US securities regulator. The goal is to align the Ether ETF with the regulatory preferences demonstrated in the approval of Bitcoin ETFs. However, the adoption of the cash creation model may impact arbitrage transactions and create a balance between regulatory compliance and market functionality. Additionally, the proposal to include staking in the ETF structure is subject to regulatory dialogue, with skepticism about the SEC’s willingness to permit staking within spot Ether ETFs. The SEC’s decision on various spot Ether ETF applications, including ARK 21Shares, is anticipated by May 23. The amendment has sparked discussions around regulatory compliance, innovation, and has influenced market dynamics, with Ether’s price surging after the announcement.