Key Points
Several leading Ether exchange-traded funds (ETFs) issuers, including Ark Investments Management and Fidelity Investments, have adjusted their strategies due to regulatory pressures from the U.S. Securities and Exchange Commission (SEC).
They have decided to remove staking from their plans.
This decision could enhance the likelihood of an Ether (ETH) ETF being approved.
However, it has ignited discussion and concern within the crypto community due to the importance of staking.
The Implications of Removing Staking
Staking, the process of locking up cryptocurrencies to validate transactions in exchange for rewards, is a significant consideration for many investors.
The lack of staking in Ether ETFs could greatly affect their attractiveness compared to directly purchasing Ether for staking purposes.
Brian Rudick, a senior strategist at GSR, highlighted the “immediate opportunity cost” of holding Ether in an Ether ETF that does not offer staking.
Ether is built using the proof-of-stake (PoS) mechanism.
Therefore, the removal of staking from Ether ETFs could have wider implications for supply, network security, and decreased decentralization due to less staked ETH.
A member of the X community shared their thoughts on the staking concerns.
They suggested that Ether ETFs were asked to eliminate staking due to the price difference to Bitcoin (BTC).
The individual expressed the belief that institutional investors would likely stake Ether because of its lower price, potentially leading to supply issues in the future.
Another X member compared staking to “earning interest on your savings,” which falls under the “securities umbrella.”
They suggested that this was the reason for the removal of staking from Ether ETFs.
Amid these differing views on the changes to Ether ETF staking opportunities, the SEC started discussions with potential issuers of spot Ether ETFs on May 22.
A decision is expected within the next few hours.
This news follows the recent passing of the FIT21 crypto bill in the U.S. House of Representatives, which received votes in favor from 208 Republicans and 71 Democrats, with 136 voting against.
