The United States Securities and Exchange Commission (SEC) has announced a delay in its decision regarding the approval of Ether staking embedded in two Grayscale funds, the Grayscale Ethereum Trust ETF and the Grayscale Ethereum Mini Trust ETF. This decision, initially anticipated, has been postponed until June 1, with the ultimate deadline for a resolution set for the end of October.
Staking, a process where cryptocurrency is locked up to bolster blockchain operations and security, is a significant feature that may enhance the attractiveness of these Ether ETFs. It allows stakers to earn rewards, which could lead to greater investment appeal. The proposal, filed by the New York Stock Exchange (NYSE) on February 14, aims to permit investors a more lucrative avenue through staking their holdings in Grayscale’s Ether ETFs.
The annual yield on staked Ether is currently estimated at around 2.4% on Coinbase, while other exchanges like Kraken offer yields ranging from 2% to 7%. These figures have prompted a cumulative net inflow of $2.28 billion into Ether ETFs since their inception in 2024, as reported by Sosovalue.
Despite this delay, the SEC is actively moving forward with regulatory considerations for crypto ETFs. Recently, the agency approved options trading for several spot Ether ETFs, including those from notable funds such as BlackRock, Bitwise, and Grayscale. This approval represents a significant step in broadening the utility of these funds for institutional investors, allowing contracts that give the right, but not the obligation, to buy assets at predetermined prices.
The push for Ether ETF staking occurs amidst a stronger performance in the Bitcoin ETF market, which saw inflows surpassing $35.4 billion as of April 11, while the Ether funds lagged behind with a total of $2.2 billion. This discrepancy raises questions about the adoption rates of Ether ETFs compared to their Bitcoin counterparts.
Ether itself has encountered challenges during this bullish market phase, falling short of its previous all-time high, with current trading below the $2,000 mark as of mid-April.
As the SEC deliberates the future of Ether staking in ETFs, the outcomes will not only influence market strategies but also dictate the trajectory of institutional engagement with Ethereum-based assets.
