Summary

• ARK Invest and 21Shares have filed a formal request with the SEC to establish the Ark 21Shares Ethereum ETF.
• This would be the first-ever ETF in the United States that directly invests in Ethereum (ETH).
• The fund will secure custody of its assets through the Coinbase Custody Trust Company.

ARK Invest and 21Shares, two prominent asset management firms, have submitted a formal request to the U.S. Securities and Exchange Commission (SEC) for approval to establish the Ark 21Shares Ethereum ETF. This groundbreaking initiative represents the first-ever attempt to introduce an exchange-traded fund (ETF) in the United States that directly invests in Ethereum (ETH), the second-largest cryptocurrency by market capitalization.

As part of its operational strategy, the fund intends to secure custody of its assets through the Coinbase Custody Trust Company.

Upon this announcement, the cryptocurrency market witnessed a brief surge in both Ether (ETH) and Bitcoin (BTC) prices. However, this rally proved to be short-lived, and both digital assets have now settled back to their pre-filing levels.

The announcement had an immediate impact on crypto markets, with both Ether and Bitcoin initially experiencing short-lived price upswings. 

This development comes on the heels of numerous applications for a highly sought-after spot Bitcoin ETF. Notably, Ark and 21Shares had also collaborated on a joint application in this regard. The SEC, however, recently postponed its decision on all of these applications.

Moreover, anticipation is building around the SEC's forthcoming decision on the approval of the first futures-based Ethereum ETF. This decision is expected to be made by mid-October. Analysts predict that the industry will continue to advocate for more crypto ETFs, especially following Grayscale's recent legal victory over the SEC. 

A spot ETH ETF is expected to be a prominent contender, given its market similarities to Bitcoin, including actively traded futures and spot markets on the Chicago Mercantile Exchange (CME), a crucial regulated marketplace for institutional investors.