Ether, the native token of the Ethereum blockchain, experienced a 2% surge in price, surpassing $2,400, following amendments made to the spot Ethereum exchange-traded fund (ETF) filing by asset managers Ark Invest and 21Shares. The updated S-1 paperwork, filed with the U.S. Securities and Exchange Commission (SEC), aligns the ETF with the structure of spot bitcoin ETFs that were approved by regulators in January.
According to Bloomberg Intelligence’s Eric Balchunas, the amendments bring the ETF “in line” with the recently approved spot bitcoin ETF prospectus. The changes include the introduction of a cash creation and redemption mechanism, which was favored by the regulatory agency for spot bitcoin ETFs. Balchunas noted that the document also added a section discussing the possibility of staking ether through trusted third-party providers, which would allow the fund to lock up some of its holdings and earn rewards.
The news of the amended filing had an immediate impact on the price of ether, with the cryptocurrency surging nearly 2% within an hour. This price increase brought ether to a two-week high, marking its first time above $2,400 since January 22. Over the past 24 hours, ether has outperformed the broader cryptocurrency market, with a 2.4% gain compared to a 1.2% increase in the CD20 index, which tracks the largest digital assets, and a 0.4% gain in bitcoin.
The amendments made by Ark Invest and 21Shares to the spot ETH ETF filing indicate a growing interest in offering investment products that provide exposure to cryptocurrencies. The approval of spot bitcoin ETFs in January paved the way for similar products focused on other digital assets. The inclusion of a cash creation and redemption mechanism in the ETF filing aligns with the regulatory preferences and requirements for these types of investment vehicles.
The possibility of staking ether through trusted third-party providers also highlights the potential for the fund to generate additional returns through participation in the Ethereum network’s proof-of-stake consensus mechanism. Staking involves locking up cryptocurrency holdings to support the network’s operations and earn rewards in return.
Overall, the amendments made to the spot ETH ETF filing by Ark Invest and 21Shares have had a positive impact on the price of ether, signaling increased investor interest in the cryptocurrency. The changes align the ETF with the structure of previously approved spot bitcoin ETFs and introduce the potential for staking ether to generate additional returns. As the cryptocurrency market continues to evolve, the approval and launch of ETFs focused on digital assets could provide investors with new avenues for exposure to this emerging asset class.