Decision on Ether Staking for Grayscale Funds Put on Hold by SEC
A verdict on the implementation of Ether staking in two funds from Grayscale has been put on hold by the U.S. Securities and Exchange Commission (SEC). This notice, which pertains to the Grayscale Ethereum Trust ETF and Grayscale Ethereum Mini Trust ETF, has been postponed to June 1 according to an announcement from the SEC on April 14. Broadly speaking, the final deadline for a decision is October’s end.
A proposed rule change that would allow Grayscale’s Ether ETF investors to stake their holdings was filed by the New York Stock Exchange (NYSE) on February 14. Staking is the practice of holding cryptocurrency in a digital wallet to uphold the operation and security of a blockchain network, in return for rewards. This feature may prove to be a vital aspect of Ether ETFs as the obtained yield could enhance the appeal of these funds to investors.
SEC’s announcement of the delay. Source: SEC
The estimated yearly return on staked Ether stands at 2.4% on Coinbase, with Kraken offering a range from 2% to 7%. As per reports from Sosovalue, since their introduction in 2024, Ether ETFs have received net inflows totaling $2.28 billion.
Staking permissions on Ether ETFs are being sought by other asset managers as well, including BlackRock’s 21Shares iShares Ethereum Trust. The firm also requested for staking services permission back in February and is presently waiting for the necessary authorization.
Multiple Spot Ether ETFs Get SEC Approval for Options
Notwithstanding the delay on staking applications, the SEC is making progress with regard to regulation requests concerning crypto ETFs. On April 9, the agency greenlit options trading on various spot Ether ETFs. This enables derivatives trading on funds from BlackRock, Bitwise, and Grayscale.
The practice of options trading provides the privilege to purchase and sell contracts, conferring investors the option (but not a requirement) of acquiring an asset at a fixed price. Notably, this approval extends the utility of the funds for institutional investors.
These attempts to broaden the appeal of Ether ETFs are a reflection of the relative underperformance in comparison to Bitcoin ETFs that were initiated in January 2024. While the aggregate inflow into Ether ETFs amounts to $2.2 billion as of April 11, Bitcoin funds enjoyed inflows topping $35.4 billion as indicated by Sosovalue.
Compared to other assets like XRP and Solana, Ether has had a tough time in the ongoing bull market. Ether’s 52-week peak of $4,112 has failed to exceed its record high value of $4,866 from November 2021. As of April 14, the token was trading under the $2,000 level.
Final Words
The decision on whether or not to allow Ether staking for Grayscale’s Ether ETFs will not only impact the funds’ attractiveness to investors but also potentially have a significant effect on the broader crypto market. As we impatiently wait for the SEC’s decision in June, it’s clear the growing interest in staking underscores Ethereum’s potential for outsized returns. But remember, like all investments, staking too involves risk and diligence is always key.
