21Shares Core Ethereum ETF (Cboe BZX Exchange, Inc.:CETH) has entered into custodial service agreements with BitGo New York Trust Company, LLC and Anchorage Digital Bank N.A., broadening its network for securing its ether holdings. The agreements, effective from September 11, 2024, mandate the custodians to maintain segregated accounts for the ETF's ether and necessitate reasonable insurance coverage.
The newly formed partnerships will complement the existing custody arrangement with Coinbase (NASDAQ:COIN) Custody Trust Company, LLC, as the ETF's sponsor, 21Shares US LLC, plans to utilize the services of all three custodians. The sponsor will allocate the ETF's ether holdings among the custodians based on several factors, including security assessments, insurance policies, and associated fees, without disclosing the specific distribution to shareholders.
These custodial services are part of the ETF's operational strategy to ensure the safekeeping of its digital assets, with the sponsor bearing any transfer fees between custodians. The agreements are set for a one-year term with automatic renewals unless terminated by either party with prior notice.
This expansion in custodial services reflects the ETF's commitment to the security and diversification of its digital asset holdings. The information is based on a press release statement filed with the SEC.
InvestingPro Insights
The 21Shares Core Ethereum ETF (CETH) has recently expanded its custodial services, which is a strategic move to bolster the security and management of its assets. Looking at the latest metrics from InvestingPro, CETH has faced some headwinds in the market with a 1-week price total return of -0.93% and a more significant 1-month price total return of -12.03%. Over a longer term, the 3-month and 6-month price total returns have both dropped to -32.33%, mirroring a challenging period for the ETF.
The previous close price of CETH was at 11.7 USD, with an average daily volume over the past three months of 0.13 million. These figures highlight the current trading environment of CETH and may inform investors about the liquidity and recent performance of the ETF.
An InvestingPro Tip suggests that investors should consider the impact of broader market trends on digital asset ETFs, which can be quite volatile. Moreover, there are 15 more InvestingPro Tips available that can provide deeper insights into ETF investment strategies. Another tip emphasizes the importance of understanding the role of custodial services in the overall risk management framework for such investment vehicles.
These metrics and tips from InvestingPro offer a real-time perspective on the performance and considerations for investors in the 21Shares Core Ethereum ETF, complementing the article's discussion on the ETF's operational strategies and custodial partnerships.
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