Ether exchange-traded funds (ETFs) in the U.S. could potentially begin staking a fraction of their tokens as early as May, as indicated by Bloomberg Intelligence analyst James Seyffart.
On April 9, the U.S. Securities and Exchange Commission (SEC) granted exchanges permission to list options contracts linked to spot Ether (ETH) ETFs following the approval of Bitcoin (BTC) ETF options in September. However, issuers are still awaiting authorization from the regulator to enable staking for Ether ETFs, having submitted multiple requests for approval earlier this year.
Source: James Seyffart
The acceptance of options contracts may signify a significant step toward gaining regulatory approval for staking services in the U.S. Seyffart mentioned on April 9 that approval for staking on ETH funds could arrive as soon as May, though it might take until late 2025 for full authorization.
“They could be cleared for staking earlier, but the final deadline is at the end of October,” Seyffart stated in a post on the X platform. “There might be intermediate deadlines before the final decision (either approval or denial) in late May and late August.”
Options are financial derivatives that grant investors the right, but not the obligation, to buy or sell an asset at a set price before a specific date. Staking, in contrast, involves locking up a cryptocurrency like ETH to support the network operations, such as transaction validation, in exchange for rewards.
In the context of ETH funds, options contracts enable investors to hedge or speculate on the value of tokens, while staking provides a pathway to earn rewards through involvement in Ethereum’s proof-of-stake network.
Ether ETF inflows.
Related: SEC approves options on spot Ether ETFs
Advancements in Adoption
Ether ETFs were launched in June 2024 but faced challenges in attracting notable investor interest. According to Farside Investors, the funds have experienced net inflows of $2.4 billion as of April 10, in contrast to the $35 billion amassed by Bitcoin ETFs that were introduced in January. Analysts believe that the SEC’s endorsement of Ether ETF options could be a catalyst for increased adoption.
Asset managers are also awaiting the SEC’s approval for their requests to permit in-kind creations and redemptions for Bitcoin and Ether ETFs.
The development of options markets linked to spot crypto ETFs is considered a “monumental advancement” in the crypto landscape, creating “extremely compelling opportunities” for investors, according to Jeff Park, who leads alpha strategies at Bitwise Invest.
However, staking could represent the most significant advancement for Ether funds.
In March, Robbie Mitchnick, BlackRock’s digital assets leader, remarked that Ether ETFs are “less ideal” without the ability to stake. “A staking yield is a critical component of how investment returns can be generated in this space.”
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