Cathie Wood's Ark Invest threw a curveball into the hotly contested race for an Ethereum ETF. In a surprising move, Ark has ended its partnership with 21Shares and exited the competition entirely. This sudden departure has cast a shadow of doubt on the near future of Ethereum ETFs, just as issuers were putting the finishing touches on their applications.

Ark Makes a Sharp Exit

A recently amended registration statement revealed the Ark 21Shares Ethereum ETF undergoing a rebranding to the 21Shares Core Ethereum ETF. This name change signifies Ark's complete withdrawal from the project.

An Ark spokesperson confirmed the company's belief in "the transformative potential and the long-term value of the Ethereum blockchain." However, they clarified that Ark "will not be moving forward with an Ethereum ETF" at this time.

The silver lining? The collaboration between Ark and 21Shares continues on other projects, including their existing Bitcoin ETF and the Blockchain and Digital Economy Innovation ETF. Ark remains "fully committed" to providing investors with access to innovative technologies.

A Cause for Concern?

Ark's exit comes at a critical juncture. Just when the crypto world braced itself for another disappointment, the SEC unexpectedly approved ETH ETFs in late May, sending a jolt of excitement through the market. Since then, a fierce competition has unfolded among issuers scrambling to file their S-1 forms, the final hurdle before their ETFs can hit the trading floor.

Incomplete Forms and Strategic Moves

However, a closer look reveals a wrinkle in the race. Many issuers, including giants like BlackRock, VanEck, and even 21Shares, haven't submitted complete S-1 forms. Key details, such as fees, remain conspicuously absent. This strategic ambiguity could be a calculated move to nudge the SEC for guidance or to gauge competitor pricing and secure a competitive edge.

Alternatively, the incomplete forms might reflect a cautious approach, anticipating potential rejections from the SEC. While Bloomberg ETF analyst Eric Balchunas remains optimistic about a late June launch, he warns that the SEC might throw issuers another curveball, pushing the potential launch date back to July 4th.

Ethereum's Price Reflects Uncertainty

The hesitancy and delays from issuers have reverberated in Ethereum's price action. After a surge from $2900 to $3900, ETH has become stuck in a holding pattern below $3800. This stagnation reflects market indecision and the lingering fog of uncertainty surrounding Ethereum ETF approval.

Ark's departure might signal a long and arduous road ahead for Ethereum ETFs. The saga remains very much an open question, with the SEC holding the key cards. Only time will tell how this drama will unfold, especially considering the commission's unpredictable nature.