Ether ETFs in the U.S. May Begin Staking by May, Analyst Predicts

According to Cointelegraph, Ether exchange-traded funds (ETFs) in the United States might soon be able to stake a portion of their tokens, potentially starting as early as May. This development follows the U.S. Securities and Exchange Commission's (SEC) recent authorization for exchanges to list options contracts tied to spot Ether ETFs. This approval came after the SEC had previously greenlit Bitcoin ETF options in September. Despite this progress, issuers are still awaiting the regulator's permission to offer staking services for Ether ETFs, having submitted numerous requests earlier this year. The approval of options contracts is seen as a significant step toward regulatory acceptance of staking services in the U.S. Bloomberg Intelligence analyst James Seyffart indicated that while staking clearance for ETH funds could occur as early as May, it is more likely to be finalized by the end of 2025. Seyffart noted potential intermediate deadlines for approval or denial in late May and late August. Options are financial derivatives that provide investors the right, but not the obligation, to buy or sell an asset at a predetermined price before a specific date. In contrast, staking involves locking up cryptocurrency, such as ETH, to support network operations like transaction validation, in exchange for rewards. Ether ETFs, which launched in June 2024, have struggled to gain significant investor interest. Data from Farside Investors shows that as of April 10, these funds have seen net inflows of $2.4 billion, compared to $35 billion for Bitcoin ETFs introduced in January. Analysts suggest that the SEC's approval of Ether ETF options could boost adoption. Asset managers are also awaiting the SEC's decision on requests to allow in-kind creations and redemptions for both Bitcoin and Ether ETFs. The emergence of options markets tied to spot crypto ETFs is considered a monumental advancement in crypto markets, creating compelling opportunities for investors, according to Jeff Park, Bitwise Invest’s head of alpha strategies. However, staking could represent the most significant advancement for Ether funds. In March, Robbie Mitchnick, BlackRock’s head of digital assets, remarked that Ether ETFs are less effective without staking, as staking yields are a crucial component of generating investment returns in this space.