Ethereum After Arc Invest and the 21Shares Space Ethereum ETF App Upgrade Pumps
ETH price surges post-arch investment, 21Shares ETF correction. The update aligns the position of the ETH ETF with a cash creation and redemption model to the Bitcoin ETF. The introduction of ETH shares in the revised application process is uncertain pending regulatory approval.
Ethereum's native token Ether (ETH) has experienced a price increase, after the news of an update on the application of the Ethereum Exchange-Traded Fund (ETF) by Arc Invest and 21 shares, before resuming the price of $2,424.
Ethereum (ETH) price chart
The news was another positive development for the Ethereum ecosystem after the Denkun update was successfully implemented on the Holesky testnet.
An update to identify the Ethereum ETF app
Ark Invest and 21Shares have filed an update to their joint application for the Spot Ethereum ETF, making significant improvements to their approach.
The revised S-1 filing introduces a cash creation and redemption policy that mirrors the structure of the recently approved Bitcoin ETFs. This adjustment aims to streamline the creation process, with authorized participants limited to cash creations and redemptions, excluding in-kind transactions involving ETH.
The move is consistent with regulatory expectations and operational efficiency, reflecting the SEC's preference for cash-based methods in Bitcoin ETF approvals.
In addition, the updated file introduces the possibility of Ethereum's sustainability, with plans to include Ether tokens from the trust's cold vault balance. Pinning carries the risk of loss, but it can still yield rewards that count as income. However, as noted in the parenthetical sections of the application, uncertainty looms over the inclusion of stock in the final proposal. Bloomberg ETF analyst James Seifert remains skeptical, suggesting that the SEC may not allow positions in Ethereum ETFs.
Market response and expectations
News of Ark Invest and 21Shares upgrading their Ethereum ETF app positions has sparked mixed reactions among investors and industry observers. While this indicates a positive development for spot Ethereum ETFs, expectations regarding approval are mixed.
As the SEC deadline approaches on May 23 for a decision on the Ethereum ETF, analysts differ in their assessments. Polymarket reports a 43% chance of approval in May, while Seifert suggests a 60% chance. Standard Chartered Bank is very positive for approval in May, contrary to TD Cowen's expectation of no approval in 2024.
Despite the uncertainty surrounding the regulatory approval, Ethereum's price increase reflects investor optimism and interest in the launch of the Ethereum ETF. Stakeholders look forward to further developments in the ETH ETF space, closely monitoring regulatory decisions and industry dynamics.
