US SEC, 'Ethereum Spot ETF Staking' Approval Review Announcement Postponement
SEC announcing extension of review period (Source: SEC)
The US Securities and Exchange Commission SEC has decided to delay the decision on whether to introduce a staking function within Grayscale's Ethereum spot exchange-traded fund ETF until June 1. This extension is for reviewing the rule change application submitted on behalf of Grayscale by the New York Stock Exchange NYSE in February. The application includes contents that allow investors to directly stake Ethereum held by the ETF to earn returns. The SEC's final judgment is expected to be made by the end of October.
Staking is a method of depositing cryptocurrency in a wallet for a certain period to support the stability and operation of the blockchain network and receiving rewards in return. Especially, the staking function with an expected annual yield of 2-7% is assessed as a key factor that enhances the investment attractiveness of the Ethereum ETF. The staking yield is approximately 2.4% at Coinbase, and it is recorded at a level of 2-7% at Kraken.
The current move to introduce the staking function is expanding not only in Grayscale but also in asset management companies like 21Shares, in which BlackRock participates. 21Shares has also submitted an application to the SEC to allow staking in Ethereum ETF last February and is awaiting the approval result.
While the approval of staking is on hold, the SEC allowed option trading feature for Ethereum spot ETFs of major managers like BlackRock, Bitwise, and Grayscale on the 9th. Option trading deals with the derivatives that grant the right to buy or sell assets at a specific price, which is a useful tool for institutional investors to control risk or expand profit strategies. This decision is interpreted as a signal to enhance the usability of ETFs and accelerate the establishment of cryptocurrency investment products within the institutional framework.
Meanwhile, in the cryptocurrency market, Ethereum is showing relatively low performance compared to Bitcoin. The Ethereum spot ETF launched in 2024 has recorded a net inflow of about $2.2 billion so far, but the Bitcoin spot ETF has attracted more than $35.4 billion during the same period. Ethereum is also showing weakness compared to Ripple XRP and Solana in this year's bull market, and its 52-week high of $4,112 does not reach its all-time high of $4,866 recorded in November 2021. As of April 14, Ethereum is trading below $2,000.
On the other hand, in the Asian market, there are more advanced movements. Last week, the Hong Kong Securities and Futures Commission SFC officially approved the provision of staking service for Ethereum spot ETF. Cryptocurrency exchanges such as HashKey and OSL announced on April 10 that they have obtained authority to provide a staking service based on this, showing Hong Kong's proactive stance in this area.
Despite the ongoing regulatory uncertainty, the expansion of various functions, including staking, is drawing interest from institutional investors. This is why the competitiveness of Ethereum ETF in the future is said to depend on whether the staking option is introduced.