21Shares Updates ETF ETF Application, Ends Partnership with ARK Invest

21Shares has filed an updated S-1 application for its Ethereum spot exchange-traded fund (ETF), rebranding it from the Ark 21Shares Ethereum ETF to the 21Shares Core Ethereum ETF. This change comes alongside ARK Invest’s decision to end its partnership with the firm, signaling a strategic shift for both firms.

21Shares Ends ARK Invest Partnership

According to the newly amended Form S-1, there are no updates to the fees associated with the ETF. Despite Ethereum’s potential and long-term value, a representative from ARK Invest confirmed that the firm will not proceed with an Ether ETF at this time. 

The decision reflects a reassessment of ARK Invest’s investment strategy, highlighting the dynamic nature of the cryptocurrency investment environment.

The dissolution of the partnership specifically affects the Ether ETF, but it does not impact the ongoing collaboration between 21Shares and ARK Invest on other projects. 

ARK Invest and 21Shares BTC ETF

Notably, the two firms continue to work together on the ARK 21Shares Bitcoin ETF, which launched in January. This ETF has been a notable endeavor, showcasing the successful synergy between the two firms.

In their collaborative efforts, 21Shares sponsored the ETF, while Delaware Trust Company served as the trustee. The underlying Ether assets were securely held by Coinbase Custody Trust Company. ARK Investment Management played a supporting role as a sub-adviser, responsible for marketing the shares to potential investors.

Blockchain and Digital Economy Innovation ETF

Beyond their Bitcoin and Ethereum futures projects, the duo launched another innovative product—the ARK 21Shares Blockchain and Digital Economy Innovation ETF. This ETF aims to invest in public equities of companies within the blockchain industry, offering investors what the firm describes as “holistic exposure” to the growth of blockchain technology. 

This product remains a testament to the collaborative strength of 21Shares and ARK Invest, even as their paths diverge regarding the Ether ETF.

Crucial Filings

ARK Invest and 21Shares had previously revised their spot Ether ETF proposal on May 10, dropping plans to stake a portion of the fund’s assets through third-party providers. The February 7 filing included a clause that anticipated receiving ETH as a reward for staking, classifying the resulting earnings as income generated by the fund. 

In September 2023, ARK Invest and 21Shares submitted an application for a spot Ether ETF, aiming to provide direct exposure to Ether and trade on the Cboe BZX Exchange. The exchange utilizes the CME CF Ether-Dollar Reference Rate—New York Variant, aligning with industry standards for trading and valuation.