Ark Invest and 21shares have made revisions to their proposal for an exchange-traded fund (ETF) focused on Ethereum, excluding the previously included staking options. This change represents a significant shift from their original filings, which had considered partnering with trusted staking providers to manage a portion of the trust’s assets.
In the initial proposal, Ark Invest, led by renowned investor Cathie Wood, and 21shares outlined a plan that would allow the trust to engage in staking. Staking involves leveraging assets to support network operations and earn rewards, typically in the form of cryptocurrency. This practice is commonly used in the operation of blockchain networks like Ethereum, where participants validate transactions and contribute to the network’s security.
The decision to remove the staking components from the proposal reflects a cautious approach, possibly aiming to align with regulatory perspectives. It is worth noting that Fidelity’s ETH-based ETF was the first to propose including staking in its structure, setting a precedent in the ETF landscape. The exclusion of staking by Ark Invest and 21shares in their latest filing could influence how other funds design their strategies, taking into account evolving regulations and market conditions.
Eric Balchunas, Bloomberg’s lead ETF analyst, described this adjustment as potentially a “hail mary” move. He speculated that it could be an attempt to address potential concerns raised by the Securities and Exchange Commission (SEC) in their review of the proposal. However, no official comments from the SEC have been made yet. Balchunas also suggested that it could be a strategic move to avoid giving the SEC another reason to reject the proposal.
What are your thoughts on Ark Invest’s decision to remove staking from their proposal? Feel free to share your opinions in the comments section below.
