Ethereum ETF Ownership Soars as Staking Proposal Gets SEC Attention
Ethereum ETFs on the Rise – The U.S. Securities and Exchange Commission (SEC) has recently acknowledged a 19b-4 filing from the Cboe BZX Exchange, representing 21Shares, which seeks public comments regarding the potential approval of ether staking in the 21Shares Core Ethereum ETF. This move, if granted, would enable the ETF to generate additional returns by staking its ETH holdings, passing those returns back to investors.
What is Ether Staking for ETFs?
According to the filing, the ether staked on behalf of the Trust would be exclusively owned by the Trust. Notably, the filing emphasized that this staking activity would not be classified as ‘delegated staking’ or ‘staking as a service’. This distinction means that the staking would be carried out directly by the sponsor without involving third parties. The primary aim is to enhance the returns generated by ETH holdings, benefiting ETF investors with additional yields.
Recent Moves in the Ethereum ETF Landscape
This filing follows a similar action taken by NYSE Arca, which filed to permit staking for Grayscale’s Ethereum ETFs last week. Notably, the SEC approved spot Ethereum ETFs last summer, signaling a shift toward crypto-friendly regulations. However, many firms, wary of previous regulatory challenges, omitted staking activities from their registration statements. Under the leadership of former SEC Chair Gary Gensler, the SEC had previously labeled proof-of-stake tokens as securities.
Institutional Interest in Ethereum ETFs
The regulatory environment for staking and Ethereum continues to evolve. With a new stance under the Trump administration, many anticipate that staking will soon be legally regulated, making Ethereum more appealing to institutions. According to Ruslan Lienkha, Chief of Markets at YouHodler, this framework would facilitate broader adoption, with Ethereum poised to attract increased liquidity due to its yield-generating staking opportunities.
Institutional Growth in Ethereum ETFs
Institutional ownership of Ethereum ETFs saw a notable rise in the fourth quarter of 2024, with ETH ETF ownership climbing from 4.8% to 14.5%, while Bitcoin ETFs experienced a slight dip from 22.3% to 21.5%. This increase highlights growing institutional confidence in Ethereum, especially as staking activities provide an additional layer of potential returns for investors.
As the SEC continues to evaluate the implications of Ethereum staking, the growing interest in ETH ETFs underscores the evolving regulatory and investment landscape in the cryptocurrency sector.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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