Staking for ether ETFs gathers steam as BlackRock talks up potential, NYSE files on behalf of Bitwise fund
Quick Take BlackRock’s head of digital assets spoke about the potential benefits of allowing staking for spot Ethereum ETFs, which by some estimations, have underperformed in terms of attracting investors. Meanwhile, NYSE Arca filed a proposed rule change that would pave the way for permitting Bitwise’s ether ETF to earn yield from staking the cryptocurrency.
Slowly but surely the drive to allow spot Ethereum exchange-traded funds to earn yield by staking the popular cryptocurrency is gaining momentum.
On Thursday, while BlackRock's Head of Digital Assets Robert Mitchnick waxed optimistically about how allowing issuers of Ethereum ETFs to simultaneously stake the cryptocurrency could unlock added demand, NYSE Arca filed a proposed rule change that, if approved, would permit Bitwise's ether ETF to earn yield.
"There’s obviously a next phase in the potential evolution of [ether ETFs],” Mitchnick said at a conference on Thursday, according to CNBC . "A staking yield is a meaningful part of how you can generate investment return in this space, and all the [ether] ETFs at launch did not have staking."
Last year, under the leadership of Gary Gensler, the U.S. Securities and Exchange Commission generally took a more antagonistic stance with regard to crypto and the possibility of allowing staking for Ethereum ETFs seemed a nonstarter. Issuers like BlackRock and Fidelity secured approvals and launched their ether ETFs in July 2024, but without staking.
Now, with a more crypto-friendly government in place, the consensus appears to be that ETFs could soon be allowed to stake.
If the SEC approved a rule change and allowed Ethereum ETFs to stake and earn yield, they should able to also generate revenue by holding the cryptocurrency. NYSE Arca's filing on behalf of the Bitwise ether ETF on Thursday follows Grayscale , 21Shares and Fidelity filing similar proposals.
While cumulatively spot Ethereum ETFs have attracted billions of dollars in investment, their success pales in comparison to the historic performance of spot Bitcoin ETFs.
As a point of comparison, BlackRock's ether ETF has about $2.3 billion in assets under management versus the firm's bitcoin ETF which has nearly $48 billion in AUM, according to The Block Data Dashboard .
"There are a lot of fairly complex challenges that have to be figured out, but if that can get figured out, then it’s going to be sort of a step change upward in terms of what we see the activity around those products is," Mitchnick said.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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