s the crypto market continues to evolve, the pursuit of spot Ethereum ETFs has gained momentum. Chicago Board Options Exchange (Cboe) recently filed two 19b-4 applications with the SEC, seeking approval to list ARK 21Shares Ethereum ETF and VanEck Ethereum ETF investment products on Cboe's BZX exchange. The SEC now has 240 days to make a ruling on these applications.
Understanding S-1 and 19b-4 Filings
It's essential to distinguish between S-1 and 19b-4 filings. S-1 forms are submitted by firms intending to list a specific investment product on a national exchange, while 19b-4 forms are filed by self-regulatory organizations (SROs), like stock exchanges, to modify their trading rules. Notably, the SEC must respond within a defined timeframe to 19b-4 filings.
The Race Begins
Bloomberg analyst James Sayffart has declared the official start of the race for a spot Ethereum ETF with Cboe's 19b-4 filing. Considering the 240-day review process, a decision on these filings is anticipated around May 23, 2024. ETF analyst Eric Balchunas suggests that more similar filings are likely on the horizon.
Ark 21Shares and VanEck's Approaches
Ark 21Shares' filing outlines Coinbase as both a surveillance-sharing partner and the custodian of Ether (ETH) for the ETF, mirroring its role in numerous spot Bitcoin ETFs. 21Shares will serve as the sponsor, with Ark Invest acting as a sub-advisor. The ETF aims to track ETH performance based on the CME CF Ether-Dollar Reference Rate – New York Variant.
VanEck's filing, however, does not specify its custodian and surveillance-sharing partner. Some sources indicate that Coinbase might assume a surveillance-sharing role for VanEck Ethereum ETF as well. Notably, the ticker symbols for these ETFs have yet to be disclosed.
The SEC's Stance
While the SEC appears poised to approve futures Ethereum ETFs, it has yet to greenlight a spot crypto ETF. Notable players in the industry, including Grayscale Investments and BlackRock, are actively pursuing approval for a spot Bitcoin ETF.
A New Phase in Crypto Investment
The race for spot Ethereum ETFs represents a pivotal moment in the cryptocurrency investment landscape. As these applications undergo regulatory scrutiny, their approval could open doors to a broader range of crypto investment opportunities, impacting both institutional and retail investors. Watch for developments as the crypto market continues to evolve.