ARK no longer collaborating with 21Shares on Ethereum spot ETF, fees too low to be profitable?

According to the S-1 form submitted to the SEC on 5/31, the former Ark 21Shares Ethereum ETF has been renamed to 21Shares Core Ethereum ETF, and ARK Invest will no longer collaborate with 21Shares on the proposed Ethereum spot ETF.

Ark and 21Shares No Longer Collaborating on Ethereum Spot ETF

According to a report by The Block, a spokesperson for 21Shares confirmed the change, but 21Shares and ARK will continue their collaboration on the ARK 21Shares Bitcoin ETF set to launch in January and other existing futures products.

An Ark spokesperson also stated that Ark believes in the transformational potential of Ethereum and the long-term value of the Ethereum blockchain. However, ARK will not be advancing an Ethereum ETF at this time. Nevertheless, Ark will continue to evaluate effective ways to offer investors exposure to this innovative technology to unlock its full potential.

Cathie Wood mentioned last week that the expense ratio for the Ark 21Shares Bitcoin ETF is only 0.21%, which will not yield any profits, as Ark sees Bitcoin as a "public good." While the S-1 filing did not disclose the expense ratio for the Ethereum ETF, according to a tweet by Bloomberg analyst Eric Balchunas here, it is possible that Ark's withdrawal was due to the fees being too low. Additionally, 21Shares is gradually establishing its own brand in the United States, with its domicile in Switzerland.

Participants in the 21Shares Core Ethereum ETF

According to the submitted S-1 filing, participants in the 21Shares Core Ethereum ETF include:

Exchange: Cboe BZX Exchange

Sponsor: 21Shares US LLC

Trustee: CSC Delaware Trust Company

Ethereum Custodian: Coinbase Custody Trust Company, LLC

Trust Administrator: The Bank of New York Mellon

Authorized Participants: Jane Street Capital, LLC, Macquarie Capital USA Inc., ABN AMRO Clearing USA LLC, and Virtu Americas LLC