According to U.Today, Ark Investment, the asset management firm led by Cathie Wood, has decided not to issue an Ethereum (ETH) Exchange Traded Fund (ETF). Previously, Ark had submitted documents to the Securities and Exchange Commission (SEC) in collaboration with 21Shares, with the intention of becoming an ETH ETF issuer. However, the firm will maintain its partnership with 21Shares for the Bitcoin spot ETF, which was launched earlier this year.
In an official statement, Ark Investment expressed its continued belief in Ethereum's transformative potential and long-term value, but confirmed it will not pursue an Ether ETF product. The reason behind this sudden shift in strategy remains unclear. However, Bloomberg analyst Eric Balchunas suggests that the ongoing 'fees war' in the market, which challenges the profitability of issuers, could be a contributing factor. As a result of Ark's decision, 21Shares will now proceed with the Ethereum ETF independently.
In related news, Ark Investment reportedly experienced record outflows of $100 million on a single day. Bitcoin ETFs, in general, have struggled to gain traction among financial advisors due to concerns about market timing, regulatory compliance, and a preference for stability and long-term growth among clients. Some dealers even limit Bitcoin ETF purchases, while others prohibit advisors from selling them.
Despite this, Bitcoin ETFs have not lost their appeal to investors. For instance, BlackRock's Bitcoin ETF reported inflows of $169 million on a recent Friday, according to data from Arkham. Initially, Bitcoin ETFs were seen as a way for advisors to help clients invest in cryptocurrency, but six months later, most advisors are avoiding them. Advisors who serve older, conservative clients are particularly dismissive of Bitcoin ETFs.