Benzinga - ARK Invest, led by Cathie Wood, in collaboration with 21Shares, has submitted applications for two futures exchange-traded fund (ETF) products centered on Ether (CRYPTO: ETH) and Bitcoin (CRYPTO: BTC).
This move places them among a growing number of firms eager to introduce similar offerings.
Empowered Funds, the investment advisor for these products, filed the application with the Securities and Exchange Commission (SEC).
The proposed ETFs are named ARK 21Shares Active Ethereum Futures ETF (ARKZ) and ARK 21Shares Active Bitcoin Ethereum Strategy ETF (ARKY), according to The Block.
Watch for an exclusive interview with Cathie Wood and Benzinga CEO Jason Raznick appearing soon on "The Raz Report."
Contrary to directly investing in digital assets or spot products, these ETFs will target cash-settled futures contracts. These contracts are traded on commodity exchanges that have registration with the Commodity Futures Trading Commission (CFTC), including notable names like the Chicago Mercantile Exchange (CME).
The trajectory of crypto-related ETFs will be among the topics discussed by the industry's top thought leaders at Benzinga's Future of Digital Assets in NYC on Nov. 14, 2023.
Details from the filing reveal that the ARKZ ETF will allocate a minimum of 25% of its investments to Ether futures products linked to the ETH cryptocurrency.
The remaining funds will be distributed among U.S. Treasuries, money market tools, and repurchase agreements.
In a similar vein, the ARKY ETF will dedicate at least 25% to combined Ether and Bitcoin futures products, with the balance going to cash and cash equivalents, predominantly U.S. government securities.
The trend of ether futures in the realm of crypto ETFs is gaining traction.
This month alone, several companies, including Bitwise, Proshares, Grayscale, and Valkyrie, have submitted applications for Ether futures exchange-traded funds.
Although the SEC hasn't given its nod to these applications yet, there are whispers that the agency is gearing up to approve these ether-centric ETFs.
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It's worth noting that ARK Invest and 21Shares previously joined forces in 2021 for a spot Bitcoin ETF product application.
The Cboe revisited this application in April of the current year, making amendments in June to incorporate a surveillance sharing agreement feature, mirroring BlackRock's (NYSE: BLK) spot Bitcoin ETF filing during the same period. Decisions on three Bitcoin-futures-related funds from these firms are still pending.
The SEC postponed the decision on ARK Invest and 21Shares’ spot Bitcoin ETF application on Aug. 11.
Upcoming decision deadlines for applications from other major players like BlackRock, Bitwise, VanEck, WisdomTree, Invesco, Fidelity, and Valkyrie are slated between Sept. 1 and 4.
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