- Ether (ETH) price surged above $2,400 after Ark Invest and 21Shares amended their spot ETH ETF filing.
- The amendment includes a cash creation mechanism and explores staking ether, aligning with SEC preferences.
Ethereum’s native token, ether (ETH), surpassing $2,400 on Wednesday afternoon, marking a two-week high. This notable price surge came on the heels of an announcement that asset managers Ark Invest and 21Shares had amended their joint spot ETH exchange-traded fund (ETF) filing, sparking optimism among investors and traders alike.
ETF Filing Amendment: Strategic Shifts for Regulatory Approval
The revised filing with the U.S. Securities and Exchange Commission (SEC), unveiled on Wednesday, introduced a pivotal change to the ETF’s structure by incorporating a cash creation and redemption mechanism. This adjustment is particularly noteworthy as it mirrors a feature that the SEC has previously favored in its January approval of spot bitcoin ETFs.
The move by Ark Invest and 21Shares to align their ETH ETF proposal with the regulatory framework that facilitated the approval of bitcoin ETFs signals a strategic pivot intended to navigate the complex regulatory landscape and garner SEC approval.
Eric Balchunas, a senior ETF analyst at Bloomberg Intelligence, provided insight into the significance of these amendments. In a post on X (formerly Twitter), Balchunas pointed out that the modifications, including the exclusive reliance on cash creations. He said:
“Looks like they updated to be only cash creations and some other things that bring it in line with the recently approved spot BTC ETF prospectus.”
This development is seen as a positive step towards the potential approval of the ETH ETF, reflecting a broader acceptance of cryptocurrency-based investment products in the traditional financial ecosystem.
Exploring Ether Staking: Innovating Fund Operations
Further enriching the proposal, the updated S-1 documentation introduced a section on the possibility of staking ether through “one or more trusted third party staking providers.” This addition opens up new avenues for the fund to engage in staking activities, whereby it can lock up a portion of its holdings in return for rewards.
Staking represents a critical component of the Ethereum network’s consensus mechanism, especially following its transition to proof-of-stake (PoS) with the Ethereum 2.0 upgrade.
By including staking in the ETF’s operational framework, Ark Invest and 21Shares are not only diversifying the fund’s revenue streams but also deepening its integration with the underlying blockchain technology.
The market response to the news was swift and positive, with ETH’s price climbing nearly 2% within an hour of the announcement, breaking above the $2,400 threshold for the first time since January 22.
At the time of writing, the price of ETH has risen 2.55% in the last 24 hours, reaching a price of $2,421.32. This represents an increase of 6.56% over the past 7 days.