U.S. SEC Postpones Decision on Ether Staking for Grayscale ETFs

The United States Securities and Exchange Commission (SEC) has postponed its decision on the approval of Ether staking for two Grayscale investment vehicles. The securities regulator has delayed the verdict until June 1, 2025 regarding Grayscale Ethereum Trust ETF and Grayscale Ethereum Mini Trust ETF.

Grayscale’s Ether ETFs

Previously, on February 14, 2025, the New York Stock Exchange (NYSE) submitted a proposed rule change on behalf of Grayscale, seeking to allow investors in the company’s Ether-based ETFs to stake their holdings.

Staking is the action of immobilizing cryptocurrency in a digital wallet to support blockchain network functions and security, providing stakers with rewards as compensation. The inclusion of staking in Ether ETFs could potentially supplement investors’ returns, enhancing the appeal of these funds.

Annual Yield from Staking Ether

With Coinbase, the annual yield for staked Ether is around 2.4%, while on Kraken, a U.S.-based exchange, the annual yield ranges anywhere from 2% to 7%. According to Sosovalue, since their initiation in 2024, Ether-based ETFs have seen a cumulative net inflow of around $2.28 billion.

Competition for Staking on Ether ETFs

The competition for staking provisions in Ether ETFs also includes other asset managers, such as BlackRock’s 21Shares iShares Ethereum Trust. The firm applied for permission to provide staking services in February and is now awaiting regulatory approval.

SEC’s Approval of Options for Multiple Spot Ether ETFs

Despite delaying the decision on staking proposals, the SEC is proceeding with regulatory applications for crypto-related ETFs. On April 9, the agency granted options trading for several spot Ether ETFs, allowing for derivative features on funds from BlackRock, Bitwise, and Grayscale.

Options Trading

Options trading entails obtaining the right to buy and sell contracts, which gives investors the right (but not the obligation) to purchase an asset at a specified price. This approval provides institutional investors with additional avenues for utilizing the funds.

Comparison with Bitcoin

The attempts to bolster the appeal of Ether ETFs come as these investment vehicles have struggled to gain traction when compared to Bitcoin ETFs, which were launched in January 2024. As of April 11, the net cumulative inflow to Ether ETFs stood at roughly $2.2 billion, whereas inflow to Bitcoin funds reached a staggering $35.4 billion, according to Sosovalue.

Compared to other assets like XRP and Solana, Ether has been struggling during the bull market. The asset’s 52-week high of $4,112 did not surpass its November 2021 all-time high of $4,866. As of April 14, the token is trading below the $2,000 mark.

Conclusion

While we await the SEC’s final decision on staking for Grayscale’s Ether ETFs, it’s clear that the race for providing yield-enhancing staking provisions as part of Ether ETFs is heating up. This move can potentially make Ether-based ETFs an even more attractive investment vehicle for investors.