ProShares Files Spot Ethereum ETF Application

The U.S. Securities and Exchange Commission (SEC) has recently added a spot Ethereum exchange-traded fund (ETF) application from asset manager ProShares.

The asset manager filed a proposal to list and trade spot Ethereum ETF shares on the New York Stock Exchange (NYSE) on June 6.

NYSE Arca's Role and Public Comment Period

In a June 10 filing, the SEC noted that NYSE Arca proposed a rule change to facilitate this listing. The public now has 21 days to comment on the application. Meanwhile, the SEC has 45 days to decide, potentially by late July 2024.

However, this acknowledgment does not equate to approval. It only indicates that the SEC has received and is reviewing the filing.

Market Dynamics and ProShares' Timing

ProShares' entry into the spot Ethereum ETF market follows several other potential issuers whose 19b-4 filings were approved in May 2024. Bloomberg Intelligence ETF analyst James Seyffart commented on the timing of ProShares' move.

He noted, "Instinct initially says this won't launch on day 1 with the other ETFs whenever that is, but who knows. This is interesting... Intriguingly, ProShares is jumping in late, though."

Ark Invest and 21Shares Split

In another development, the SEC approved Ark Invest's exit from a joint ETF application with 21Shares, allowing 21Shares to proceed independently.

The SEC waived the usual 30-day delay, making the change effective immediately. The decision was based on the assessment that it does not significantly impact investor protection or competition.

Ark Invest and 21Shares recently decided to part ways, which meant they had to and did amend their S-1 form, revealing that their joint spot, Ethereum ETF, will change its name from ARK 21Shares Ethereum ETF to 21Shares Core Ethereum ETF.

A spokesperson from Ark Invest mentioned they would only proceed with an Ethereum ETF if they provided a specific reason. However, Ark remains active with its spot Bitcoin ETF, ARK 21Shares Bitcoin ETF (ARKB).

Awaiting Feedback and SEC's Remarks

Despite these developments, potential spot Ethereum ETF issuers are still awaiting feedback on their S-1 filings submitted on May 31. At least two issuers have yet to receive the SEC's comments, which were initially expected by June 7.

A recent report reveals that issuers anticipate feedback this week. This update follows SEC Chair Gary Gensler's remarks on CNBC that the approval process for S-1 forms would "take some time."

Regulatory Progress and Market Expansion

The approval process for these ETFs involves two steps: the 19b-4 filing and the S-1 filing. The S-1 forms are currently under review. Bloomberg Intelligence ETF analyst Eric Balchunas previously indicated that another round of fine-tuning comments from the SEC staff would likely precede the final approval.

Nevertheless, the acknowledgment of ProShares' spot Ethereum ETF application and the approval of Ark Invest's split from 21Shares represent significant progress in the crypto ETF sector. This highlights regulatory recognition and potential market expansion.