In a galaxy not so far away, Ether exchange-traded funds (ETFs) in the United States might just start staking a portion of their tokens as soon as May. Or not. According to Bloomberg Intelligence analyst James Seyffart, who probably has a crystal ball or at least a very fancy spreadsheet, this could happen. Or it could not. 🤷♂️
On April 9, the US Securities and Exchange Commission (SEC), the same folks who brought you the thrilling saga of Bitcoin ETF options, decided to let exchanges list options contracts tied to spot Ether (ETH) ETFs. Issuers, however, are still waiting for the SEC to allow Ether ETFs to offer staking, because why make things easy when you can make them complicated? 🎢
The approval of options contracts could be a key step toward regulatory approval for staking services in the United States. Or it could be a red herring. Seyffart said on April 9 that clearance for staking on ETH funds could come as early as May but would likely take until the end of 2025. Because, you know, bureaucracy. 🐌
“It’s possible they could be approved for staking early, but the final deadline is at the end of October,” Seyffart said in a post on the X platform. “Potential intermediate deadlines before the final approval (or denial) are in late May & late August.” So, mark your calendars, or don’t. 📅
Options are financial derivatives that give investors the right, but not the obligation, to buy or sell an asset at a predetermined price before a certain date. Staking, on the other hand, involves locking up a cryptocurrency, like ETH, to support network operations — such as validating transactions — in exchange for rewards. It’s like putting your money in a high-tech piggy bank. 🐷
In ETH funds, options contracts allow investors to hedge or speculate on the tokens’ prices, while staking offers a way to earn rewards by participating in Ethereum’s proof-of-stake network. It’s like having your cake and eating it too, but with more risk. 🍰
Progress toward adoption
Ether ETFs launched in June 2024 but struggled to attract significant investor interest. According to data from Farside Investors, the funds have seen net inflows of $2.4 billion as of April 10, compared to $35 billion for Bitcoin ETFs introduced in January. Analysts say the SEC’s approval of Ether ETF options could help spur adoption. Or it could just be another footnote in the annals of financial history. 📚
Asset managers are also waiting on the SEC to greenlight requests to allow in-kind creations and redemptions for Bitcoin and Ether ETFs. Because nothing says “progress” like waiting for permission. 🚦
The emergence of options markets tied to spot crypto ETFs is a “monumental advancement” in crypto markets and creates “extremely compelling opportunities” for investors,” Jeff Park, Bitwise Invest’s head of alpha strategies, said in a Sept. 20 X post. Or it’s just another way to lose money. 🎲
But staking could be the most significant step forward for Ether funds. Or it could be another delay in the endless saga of regulatory approval. 🕰️
In March, Robbie Mitchnick, BlackRock’s head of digital assets, said Ether ETFs are “less perfect” without staking. “A staking yield is a meaningful part of how you can generate investment return in this space.” Or, you know, you could just buy a lottery ticket. 🎫
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2025-04-10 21:05